The first step, when using dollar-value lifo retail method for inventory, is to determine the cost-to-retail percentage for the current year transactions. Hence, option C is correct.
When evaluating LIFO inventory, the "base-year" costs expressed in total dollars are used as the unit of measurement rather than the quantity and price of specific goods. Using this method, the taxpayer assembles a pool from the inventory's contents.
By employing the dollar-value LIFO method, businesses can avoid setting separate pricing tiers for each inventory item. They can instead plan layers for each inventory pool. Making sure that pools aren't being developed for no reason is vital because there comes a point where doing so is no longer financially viable.
Thus, option C is correct.
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