Consider the following account balances of Costco Wholesale Corporation, the Seattle-based warehouse store operator ($ in millions):

On Costco€™s income statement for the fiscal year 2011, the cost of the merchandise sold was $77,739 million. Compute the net cost of the acquisition of inventory for the fiscal year ending August 28, 2011. The annual report discussed the gross profit percentage (Costco calls it gross margin) and why it fell from 10.83% in 2010 to 10.69% in 2011. Provide two possible reasons for a decline in the gross profitpercentage.

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August 28 2011 $6,638 August 29 2010 $5,638 Merchandise inventories