Multiple Choice Question 118 The following data concerning the retail inventory method are taken from the financial records of Welch Company. Cost Retail Beginning inventory $ 147,000 $ 210,000 Purchases 672,000 960,000 Freight-in 18,000 Net markups 60,000 Net markdowns 42,000 Sales 1,008,000 Assuming that the LIFO inventory method were used in conjunction with the data and that the inventory at retail had increased during the period, then the computation of retail in the cost-to-retail ratio would

include both markups and markdowns and exclude beginning inventory.

exclude markups and include both markdowns and beginning inventory.

include markups and exclude both markdowns and beginning inventory.

exclude both markups and markdowns and include beginning inventory.