To Use the Gross Profit Method to Estimate the Value

question 93

Multiple Choice

To use the gross profit method to estimate the value of the ending inventory,the company needs the following information:

• A)average gross profit rate,net sales,ending inventory,and net purchases.
• B)average gross profit rate,net sales,beginning inventory at cost,and net purchases at retail.
• C)average gross profit rate,net sales,ending inventory at retail,and net purchases at retail.
• D)average gross profit rate,net sales,beginning inventory at cost,and net purchases at cost.

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Definitions:

Cost to Provide

The total expenses incurred by a company to deliver a product or service to a customer.

Decision Tree Analysis

A decision-making tool that uses a tree-like model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility.

Steps

The individual phases or actions taken in a process or procedure to achieve a particular end result.

Methodology

A system of methods used in a particular area of study or activity, often implying a structured or systematic approach.