Which of the following is the most likely explanation for this increase?

During an audit of the organization’s annual financial statements, the internal auditor notes that the current cost of goods sold percentage is substantially higher than in prior years.

Which of the following is the most likely explanation for this increase?
A . Cost of raw material inventory items is decreasing.
B . Process to manufacture goods is more efficient.
C . Labor productivity to produce goods is increasing.
D . Write-off of inventory is increasing.

View Answer

Answer: A