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Home Q & A Board Other Fields Homework Help Business Accounting
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sunjx sunjx
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5 years ago
Newbury Office Supply reported the following gross profit percentages: 2014: 37.5%; 2015: 36.2%; 2016: 20.8%.  The industry average is 35%.  What are some possible reasons for the decline in 2016?
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
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#1
5 years ago
 Possible reasons include: There could be errors in recording net sales or cost of goods sold.  Employees could have lowered the selling prices to meet sales quotas or earn higher commissions.  There could be inventory thefts by employees or customers.  There may have been price increases on purchases of merchandise inventory that may not have been reflected in sales prices.  The area in which Newbury does business may have suffered declines that are not reflected in the industry averages.
sunjx Author
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#2
5 years ago
Exactly what I needed for my quiz Smiling Face with Open Mouth
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