Which of the following is not relevant to the gross margin method of inventory valuation?
A) Gross margin percentage
B) Mark-up on cost
C) Cost percentage
D) Profit margin

Question

Quizplus · Accepted Answer

The gross margin method of inventory valuation is based on the relationship between the cost of goods sold and the gross margin (i.e., sales minus cost of goods sold) for a given period. The relevant factors are the gross margin percentage (which is used to estimate the cost of goods sold), the mark-up on cost (which is used to determine the selling price), and the cost percentage (which is the percentage of cost in relation to the selling price). Profit margin is not relevant to this method because it is a measure of profitability, not inventory valuation.

Which of the Following Is Not Relevant to the Gross