The Gross Profit Percentage for Fran's Clothing Retailer Was 37

question 106

Essay

The gross profit percentage for Fran's Clothing Retailer was 37.7% for the year ended December 31,2018 and 42.5% for the year ended December 31,2019.The industry average gross profit percentage,for both years,is 45.7%.Briefly discuss these findings.

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Definitions:

Period Cost

Costs not directly associated with production, charged as expenses during the period they arise.

Product Costs

Costs directly associated with the manufacturing of products, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to the production process and are expensed in the period they are incurred.

Indirect Materials

Supplies used in the production process that are not directly traceable to a finished product.