Which one of the following would cause a decrease in the cost ratio as used in the retail inventory method?
A) Higher retail prices
B) Lower net markups
C) More employee discounts given
D) Higher freight-in charges

Question

Quizplus · Accepted Answer

Higher retail prices increase the retail value of inventory, which, when used in the denominator of the cost ratio (cost/value), results in a lower ratio.

Which One of the Following Would Cause a Decrease in the Cost