Bolton Company's gross profit rate last year was 32.0% and this year it is 28.4%.Which of the following would not be a possible cause for this decline in the gross profit rate? A)Bolton must pay higher prices to suppliers without passing these costs on to customers. B)Bolton may have begun selling products with a higher markup. C)Bolton's average margin between selling price and inventory cost is decreasing. D)Bolton may have seen a decline in total gross profit while maintaining net sales.

Question

Quizplus · Accepted Answer

If Bolton began selling products with a higher markup, it would likely increase the gross profit rate, not decrease it.

Bolton Company's Gross Profit Rate Last Year Was 32