Ivanhoe Company uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $421200($641520), purchases during the current year at cost (retail) were $2219400($3564000), freight-in totaled $139320, sales during the current year totaled $3240000, net markups were $77760 and net markdowns were $116640. What costs should be excluded from the cost to retail ratio? $116640. $77760. $38880. $139320