The DIY store Bazar Ondine applies the retail method to its tools department, whose items turn over quickly and have similar margins. At 31 December 20X1, the counted inventory is valued at 240,000 at the displayed selling prices. The appropriate gross margin percentage of the department, which takes into account items marked down, is 35 % of the selling price (case data). The method is assumed to give a result that approximates cost. Calculate the cost of the department's inventory.
- Inventory value at selling prices
- 240,000
- Gross margin percentage of the department
- 35 %