Kindly, explain logic of solving and why answer is C
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GP Margin 2013 = Sales – COGS/Sales = 11.17%.
After adjusting for LIFO Liquidation, we get a higher COGS by $263 thousand in 2014. S0, new COGS = $(9898 + 263) thousand = $10161 thousand.
This gives a GP Margin for 2014 of 8.94%.
Hence, GP Margin is decreasing from 11.17% to 8.94%, i.e. by 2.23%.