Compute the cost of Davison Company’s inventory at December 31, 2007.

Dollar-Value LIFO Retail – On December 31, 2006 Davison Company adopted the dollar value LIFO retail inventory method. Inventory data for 2007 are as follows:

LIFO Cost

Retail

Inventory, 12/31/06

$360,000

$500,000

Inventory, 12/31/07

?

660,000

Increase in price level for 2007

10%

Cost-to-retail ratio for 2007

70%

Required

Compute the cost of Davison Company’s inventory at December 31, 2007.

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