Inventory Cost Method or Lower Cost Method

If you recorded the actual amount you paid for both items that were drop shipped and items purchased in bulk, you used the cost method to record your inventory.

I recorded the amount I paid for drop shipped items ex: if the item was $25.00 I charged the customer $50.00 = $25.00 profit. For drop shipped items I have recorded the actual amount per item (ex: $5.00 per item x 100 = $500.00 total.) Would this qualify for the cost method?

Yes.