The SG&A-To-Net Sales Percentage for Target Is 20

question 12

Multiple Choice

The SG&A-to-net sales percentage for Target is 20.1% and 9.9% for Costco.Which statement best explains this difference?

• A) Costco has greater gross sales than Target.
• B) Target provides less bulk breaking than Costco.
• C) Costco pays sales representatives less than Target.
• D) Target invests more in customer service than Costco.
• E) Costco balances low prices with less customer service than Target.

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Definitions:

Inventory

The total amount of goods and materials a business has in stock, either for sale or used in production.

Purchase Price

The amount of money paid to buy goods or services.

Merchandise Inventory

Goods or products that a retailer or wholesaler has purchased and intends to sell to customers.

Periodic System

An inventory system where inventory levels are updated in the accounting records on a periodic basis, typically at the end of an accounting period, rather than after each purchase or sale.