The Retail Inventory Method The retail inventory method is an inventory estimation technique based upon an observable pattern between cost and sales price that exists in most retail concerns. This method requires that a record be kept of (a) the total cost and retail of goods purchased, (b) the total cost and retail value of the goods available for sale, and (c) the sales for the period. Example: P8-8 Jared Jones Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018. Prepare a schedule computing estimate retail inventory using the following methods: (1) Cost (2) LCM