Chapter 6, Problem 23Q

To determine

Gross Profit Percentage:

Gross is the financial ratio that shows the relationship between the gross profit and net sales. It represents gross profit as a percentage of net sales. Gross Profit is the difference between the net sales revenue, and the cost of goods sold. It can be calculated by using the following formula:

$\boxed{\text{Gross profit percentage =}\frac{\text{Gross profit}}{\text{Net sales}}\times 100}$

Retail inventory method:

Retail inventory method is a method of estimating the cost of inventory, and it establishes a relationship between the cost, and sale price. This method shows both the cost and retail value of the goods available for sale in a company’s record.

To Indicate: The average used the way of determination, and the way of application of the gross profit method, and the retail inventory method.