Information for a firm using the dollar value (DV) LIFO retail method follows The cost to retail (C R) is provided along with price level indices The data reflects the use of the method through year one Retail Retail DV LIFO Layer Base Index Current C R Cost Base $200 1 00 $200 40 $80 year one 80 1 10 88 34 $30 For year two, ending inventory at retail (by count) totaled $450 The ending price level index for the year was 1 15 The cost to retail ratio was 42 What is the ending inventory for financial reporting purposes for this firm 1 $164 2 $54 3 $189 4 $177 The answer is $164 Please explain why $164 is the answer

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Question: Information for a firm using the dollar value (DV) LIFO retail method follows. The cost to retail (C/R) is provided along with price level indices.

Information for a firm using the dollar value (DV) LIFO retail method follows. The cost to retail (C/R) is provided along with price level indices. The data reflects the use of the method through year one.

	Retail	Retail		DV LIFO
Layer	Base	Index	Current	C/R	Cost
Base	$200	1.00	$200	.40	$80
year one	80	1.10	88	.34	$30

For year two, ending inventory at retail (by count) totaled $450. The ending price-level index for the year was 1.15. The cost-to-retail ratio was .42. What is the ending inventory for financial reporting purposes for this firm?

1. $164 2. $54 3. $189 4. $177

The answer is $164.

Please explain why $164 is the answer.

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