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The following information applies to the questions displayed below.) In preparing for an audit of the retail footwear division of a major retail organization, the
The following information applies to the questions displayed below.) In preparing for an audit of the retail footwear division of a major retail organization, the auditor gathered the following information about the organization's stores: Average sales per store Average cost of goods sold per store Number of stores Average square feet per store Average sales per full-time employee Average wage related expense per store Average net profit contribution per store A11 Stores $ 736,000 $375,000 48 1,800 $ 137,000 $ 98,000 $ 238,000 Northeast Region $ 840,000 420,000 13 2,200 $ 152,000 S 102,000 $ 285,000 southwest Region $760,000 $325,000 18 1,850 $ 140,000 82,000 $ 320,000 Mid-Central Region $630,000 $395,000 17 1,550 $ 122,000 $ 112,000 $ 115,000 An auditor performs analytical procedures that involve comparing the gross margins of various divisional operations with those of other divisions and with the individual division's performance in previous years. The auditor notes a significant increase in the gross margin at one division. The auditor does some preliminary investigation and also notes that there were no changes in products, production methods, or divisional management during the year. Based on the above information, the most likely cause of the increase in gross margin would be: Multiple Choice A decrease in the number of suppliers of the material used in manufacturing the product o An understatement of year-end accounts receivable An increase in the number of competitors selling similar products. Antent of yotend ventory
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