In Preparing for an Audit of the Footwear Division of a Major

Multiple Choice

In preparing for an audit of the footwear division of a major retail organization, an internal auditor gathered the following information about the organization's stores: In addition to labor costs, the other costs associated with each store are leasing and maintenance expenses. Which of the following is a valid conclusion?

A) Sales per store are directly related to the size of the store.
B) Employees are less productive in larger stores.
C) Gross margin is directly related to the size of the store.
D) Cost of goods sold is directly related to the size of the store.