Macy's (The Department Store Chain)classifies Its Clothing Held for Sale

question 296

Multiple Choice

Macy's (the department store chain) classifies its clothing held for sale as

• A)merchandise inventory.
• B)raw materials inventory.
• C)work in process inventory.
• D)finished goods inventory.

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Definitions:

Margin Of Safety

A financial ratio or metric that measures the difference between actual sales and the breakeven point, indicating the extent to which sales can decline before a business incurs a loss.

Contribution Margin Ratio

The percentage of sales revenue that exceeds variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Mixed Costs

Expenses that have both fixed and variable components, changing with the level of production but also incurring a base cost.

CVP Analysis

Cost-Volume-Profit Analysis, an accounting tool used to determine how changes in costs and volume affect a company's operating income and net income.