Crane Sales Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year:

		Cost		Retail
Beginning inventory		$ 30,000		$ 45,000
Purchases		190,000		260,000
Freight-in		2,500
Net markups				8,500
Net markdowns				10,000
Employee discounts				1,000
Sales revenue				205,000

If the ending inventory is to be valued at the lower-of-cost-or-market, what is the cost-to-retail ratio?

$220,000 $315,000

$222,500 $305,000

$222,500 $313,500

$222,500 $303,500