With respect to the case, don't get bent on arriving at a conclusion. Rather, spend your time setting up the analysis so that you are able to have a dynamic conversation answering "what if" questions using the data set you prepared.
It is a method of costing to evaluate the ending balance of inventory based on cost-to-retail price ration. Cost divided by retail price equals to Cost-to-retail percentage, Cost of opening balance of Inventory plus Cost of purchasing inventory during period which gives the cost of goods available for sale, Cost of Sales will be calculated by Sales times to Cost-to-retail percentage then Calculate ending inventory by deducting Cost of goods available for sale minus Cost of sales during the period.
So, at the end of the fiscal year to make sure that the cost of goods sold(COGS) is accurate and to convince the users of financial statements, for COGS, there is need to do some adjustments, then it can be accepted by all.