The Alpha Company Uses the Retail Inventory Method for Valuation

question 33

Multiple Choice

The Alpha Company uses the retail inventory method for valuation of its inventory. If an item had a cost of $45, was originally marked to sell at $60, was later priced at $55, and finally was priced at $68, the final price change is a

• A) net markup of $18
• B) markdown of $5 and a markup of $8
• C) net markdown of zero and an additional markup of $8
• D) net markdown of $5 and a net markup of $18

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Definitions:

Qualitatively

In a manner that pertains to the quality or characteristics of something, often through descriptive or subjective measures, rather than quantitative or numerical terms.

Quantitatively

In a manner that can be measured or expressed in numbers.

Dan Sullivan

The name of an individual, which without further context, cannot be uniquely defined. In business, Dan Sullivan could refer to a strategic coach or business advisor among others.

Entrepreneurs

Individuals who identify a business opportunity and take the risk of creating and managing a new enterprise to capitalize on it.