Solved

If the Net Markdowns Are Excluded from the Calculation of the Cost-To-Retail

Question 58

Multiple Choice

If the net markdowns are excluded from the calculation of the cost-to-retail ratio in the retail inventory method, what is the effect on the cost-to-retail ratio?

A) The denominator of the ratio will be lower, which results in a higher cost-to-retail ratio.
B) The denominator of the ratio will be higher, which results in a lower cost-to-retail ratio.
C) The numerator of the ratio will be higher, which results in a higher cost-to-retail ratio.
D) The numerator of the ratio will be lower, which results in a lower cost-to-retail ratio.

Correct Answer: