RETAIL METHOD: CHANGING SALES MIX. Shuford Stores has the following data for the current year:

REQUIRED:
1. Compute the cost of the ending inventory and cost of goods sold by applying the retail method separately to each category of goods.
2. Compute the cost of ending inventory and cost of goods sold by applying the retail method to all goods without regard to markup category.
3. Which computation should be preferred? Explain.

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AT COST AT RETAIL Beginning inventory 60% markup 30% markup Purchases 60% markup 30% markup Cost of goods available for sale $ 10,000 $ 16,000 10,000 13,000 20,000 29,000 200,000 320,000 100,000 130,000 $320,000 $479,000 Shuford's accountant reports that sales were as follows: CATEGORY 30% markup 60% markup Total NET SALES REVENUE $ 91,000 309,000 $400,000