.A company using the conventional retail method has the following information for the current year's operations:

	Cost					Retail
Beginning inventory	$	100,000					$	150,000
Purchases		500,000						800,000
Net markups								85,000
Net markdowns								35,000
Net sales								750,000

Management calculates the cost-to-retail percentage as 60%, equal to cost of $600,000 ($100,000 + $500,000) divided by retail of $1,000,000 ($150,000 + $800,000 + $85,000

$35,000). Which of the following statements is correct?

A) The cost-to-retail percentage should be calculated as cost of $600,000 divided by retail of $750,000 (Net sales).

B) The retail amount should be $1,035,000, excluding net markdowns.

C) The cost and retail amounts should not include beginning inventory of $100,000 and $150,000, respectively.

D) The retail amount should be $950,000, excluding net markups and net markdowns.