Question

In calculating the cost-to-retail percentage for the retail method, the retail column will not include:

a. purchases

b. purchase returns

c. abnormal shortages

d. freight-in

Answer 1

The cost-to-retail percentage for the retail method does not include purchases. It factors in other elements such as purchase returns, abnormal shortages, and freight-in.

Step-by-step explanation:

In calculating the cost-to-retail percentage for the retail method, the retail column will not include purchases. The cost-to-retail percentage is used to determine the markup or profit margin on goods sold. It is calculated by dividing the cost of the goods by their retail price. The retail column will include other factors such as purchase returns, abnormal shortages, and freight-in.