The following data relate to the merchandise inventory of the Hofma Company:

Beginning inventory at cost

$13,800

Beginning inventory at selling price

20,000

Purchases at cost

31,000

Purchases at selling price

50,000

The cost to retail percentage (ratio) to be used in calculating an estimate of ending inventory by use of the retail method is:

  1. 156%.
  2. 145%.
  3. 69%.
  4. 64%.