Mokena Company uses the retail method to approximate the average cost of its ending inventory. During the current period, the company changes the selling price of its inventory from the date of acquisition to the end of the period. Which of the following will be included in the denominator of the calculation of the cost-to-retail percentage?

• Net markups and net markdowns

• Neither net markups nor net markdowns

• Net markups, but not net markdowns

• Net markdowns, but not net markups