When computing the cost-to-retail percentage for the conventional retail method, included in the denominator are:
A)Net markups and net markdowns.
B)Neither net markups nor net markdowns.
C)Net markups, but not net markdowns.
D)Net markdowns, but not net markups.

Question

Quizplus · Accepted Answer

In the conventional retail method, net markups are included in the denominator to reflect the increased retail value, but net markdowns are excluded to maintain a conservative estimate of inventory cost.

When Computing the Cost-To-Retail Percentage for the Conventional Retail Method