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21. Given the historical cost of product Dominoe is $12, the selling price of product Dominoe is SI5.costs to sell product Dominoe are S2, the replacement cost for product Dominoe is $11. and the normal profit margin is 20% of sales price, what is the cost amount that should be used in the lower-of-cost-or-market comparison? A) $13. B) $10. C) $11. D) $12. 22. Which statement is true about the retail inventory method? A) It may not be used to estimate inventories for interim statements B) It may not be used to expedite physical inventory counts. C) It may not be used by auditors. D) There are different versions of the retail inventory method. 23. To produce an inventory valuation which approximates the lower of cost or market using the conventional retail inventory method, the computation of the ratio of cost to retail should A) include markups but not markdowns. B) include markups and markdowns. C) ignore both markups and markdowns D) include markdowns but not markups. 24. Which of the following is true of normal shortages? A) They do not include theft and shrinkage. B) They are deducted from both the cost and retail columns. C) These goods are no longer available for sale. D) This loss is considered in calculating cost-to-retail ratio. 25. A markup of 25% on cost is equivalent to what markup on selling price? A) 20% B) 25% C) 75% D) 80%

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