Karen Stewart, president of Laronco, Inc., recently attended a seminar on effectively managing a business. One session of the seminar that particularly impressed Karen was the discussion of inventory management and the various types of inventory estimation methods available for producing interim financial statements. The seminar only highlighted the characteristics of the various methods, and Karen has come to you, the company's chief financial officer, and asked you to explain the retail inventory method in more detail. In particular, Karen wants you to explain how the retail Inventory method can yield FIFO, LIFO, average cost, and lower-of-cost-or-market estimates. Outline a brief memo explaining the retail inventory method to Karen. Remember that she has a marketing background and doesn't know that much about accounting.