Company A's gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible cause for this decline in the gross profit rate? Company A's average margin between unit selling price and inventory unit cost is decreasing. O Company A may have seen a decline in total gross profit while maintaining net sales. Company A may have begun selling products with a higher markup. O Company A must have paid higher prices to suppliers without passing these costs on to customers.
Company A's gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible cause for this decline in the gross profit rate? Company A's average margin between unit selling price and inventory unit cost is decreasing. O Company A may have seen a decline in total gross profit while maintaining net sales. Company A may have begun selling products with a higher markup. O Company A must have paid higher prices to suppliers without passing these costs on to customers.
Chapter10: Inventory
Section: Chapter Questions
Problem 2MC: If a company has three lots of products for sale, purchase 1 (earliest) for $17, purchase 2 (middle)...
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![Company A's gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible
cause for this decline in the gross profit rate?
O Company A's average margin between unit selling price and inventory unit cost is decreasing.
O Company A may have seen a decline in total gross profit while maintaining net sales.
Company A may have begun selling products with a higher markup.
O Company A must have paid higher prices to suppliers without passing these costs on to customers.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe506fb0c-50e3-4995-9bf0-e11cb5936218%2Fe077fb5d-3588-4a6c-9a66-ca286f4159c2%2F6ogfp6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Company A's gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible
cause for this decline in the gross profit rate?
O Company A's average margin between unit selling price and inventory unit cost is decreasing.
O Company A may have seen a decline in total gross profit while maintaining net sales.
Company A may have begun selling products with a higher markup.
O Company A must have paid higher prices to suppliers without passing these costs on to customers.
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