When computing the cost-to-retail percentage for the average cost 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

The cost-to-retail percentage for the average cost retail method includes both net markups and net markdowns. These adjustments are made to reflect changes in the selling price of goods and their effect on the cost-to-retail relationship. Therefore, option A is the correct choice.

When Computing the Cost-To-Retail Percentage for the Average Cost Retail