COGS on inventory write down write, higher, current, correct, reported

andytrader

Zimt AG wrote down the value of inventory in 2007 and reversed the write down in 2008. Compared to ratios calculated if the write down had never occured, Zimt's reported 2007

A. current ratio was too high
B. gross margin was too high
c. inventory turnover was too high

The answer is C, but heres thier explanation:
C is correct. The write down reduced the value of inventory and increasdd cost of goods sold in 2007. The higher numerator and lower denominator mean that inventory turnover ratio as reported was too high

How would a write down increase COGS? Wouldnt it decrease it since your reporting a lower inventory cost per unit sold?