Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $16,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $579,000 | $498,000 | |
| Cost of goods sold | 306,870 | 283,860 | |
| Gross profit | $272,130 | $214,140 | |
| Selling expenses | $110,010 | $89,640 | |
| Administrative expenses | 57,900 | 59,760 | |
| Total operating expenses | $167,910 | $149,400 | |
| Income from operations | $104,220 | $64,740 | |
| Other revenue | 17,370 | 14,940 | |
| Income before income tax | $121,590 | $79,680 | |
| Income tax expense | 46,320 | 29,880 | |
| Net income | $75,270 | $49,800 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $579,000 | % | $498,000 | % |
| Cost of goods sold | 306,870 | % | 283,860 | % |
| Gross profit | $272,130 | % | $214,140 | % |
| Selling expenses | $110,010 | % | $89,640 | % |
| Administrative expenses | 57,900 | % | 59,760 | % |
| Total operating expenses | $167,910 | % | $149,400 | % |
| Income from operations | $104,220 | % | $64,740 | % |
| Other revenue | 17,370 | % | 14,940 | % |
| Income before income tax | $121,590 | % | $79,680 | % |
| Income tax expense | 46,320 | % | 29,880 | % |
| Net income | $75,270 | % | $49,800 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $20,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $728,000 | $626,000 | |
| Cost of goods sold | 349,440 | 331,780 | |
| Gross profit | $378,560 | $294,220 | |
| Selling expenses | $145,600 | $118,940 | |
| Administrative expenses | 80,080 | 81,380 | |
| Total operating expenses | $225,680 | $200,320 | |
| Income from operations | $152,880 | $93,900 | |
| Other revenue | 29,120 | 37,560 | |
| Income before income tax | $182,000 | $131,460 | |
| Income tax expense | 72,800 | 50,080 | |
| Net income | $109,200 | $81,380 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $728,000 | % | $626,000 | % |
| Cost of goods sold | 349,440 | % | 331,780 | % |
| Gross profit | $378,560 | % | $294,220 | % |
| Selling expenses | $145,600 | % | $118,940 | % |
| Administrative expenses | 80,080 | % | 81,380 | % |
| Total operating expenses | $225,680 | % | $200,320 | % |
| Income from operations | $152,880 | % | $93,900 | % |
| Other revenue | 29,120 | % | 37,560 | % |
| Income before income tax | $182,000 | % | $131,460 | % |
| Income tax expense | 72,800 | % | 50,080 | % |
| Net income | $109,200 | % | $81,380 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $21,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $758,000 | $652,000 | |
| Cost of goods sold | 379,000 | 365,120 | |
| Gross profit | $379,000 | $286,880 | |
| Selling expenses | $151,600 | $123,880 | |
| Administrative expenses | 83,380 | 84,760 | |
| Total operating expenses | $234,980 | $208,640 | |
| Income from operations | $144,020 | $78,240 | |
| Other revenue | 30,320 | 26,080 | |
| Income before income tax | $174,340 | $104,320 | |
| Income tax expense | 68,220 | 39,120 | |
| Net income | $106,120 | $65,200 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $758,000 | % | $652,000 | % |
| Cost of goods sold | 379,000 | % | 365,120 | % |
| Gross profit | $379,000 | % | $286,880 | % |
| Selling expenses | 151,600 | % | 123,880 | % |
| Administrative expenses | 83,380 | % | 84,760 | % |
| Total operating expenses | $234,980 | % | $208,640 | % |
| Income from operations | $144,020 | % | $78,240 | % |
| Other revenue | 30,320 | % | 26,080 | % |
| Income before income tax | $174,340 | % | $104,320 | % |
| Income tax expense | 68,220 | % | 39,120 | % |
| Net income | $106,120 | % | $65,200 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $20,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $724,000 | $623,000 | |
| Cost of goods sold | 369,240 | 348,880 | |
| Gross profit | $354,760 | $274,120 | |
| Selling expenses | $137,560 | $112,140 | |
| Administrative expenses | 72,400 | 74,760 | |
| Total operating expenses | $209,960 | $186,900 | |
| Income from operations | $144,800 | $87,220 | |
| Other revenue | 28,960 | 18,690 | |
| Income before income tax | $173,760 | $105,910 | |
| Income tax expense | 72,400 | 43,610 | |
| Net income | $101,360 | $62,300 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $724,000 | % | $623,000 | % |
| Cost of goods sold | 369,240 | % | 348,880 | % |
| Gross profit | $354,760 | % | $274,120 | % |
| Selling expenses | $137,560 | % | $112,140 | % |
| Administrative expenses | 72,400 | % | 74,760 | % |
| Total operating expenses | $209,960 | % | $186,900 | % |
| Income from operations | $144,800 | % | $87,220 | % |
| Other revenue | 28,960 | % | 18,690 | % |
| Income before income tax | $173,760 | % | $105,910 | % |
| Income tax expense | 72,400 | % | 43,610 | % |
| Net income | $101,360 | % | $62,300 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $18,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $639,000 | $550,000 | |
| Cost of goods sold | 325,890 | 308,000 | |
| Gross profit | $313,110 | $242,000 | |
| Selling expenses | $121,410 | $99,000 | |
| Administrative expenses | 63,900 | 66,000 | |
| Total operating expenses | $185,310 | $165,000 | |
| Income from operations | $127,800 | $77,000 | |
| Other income | 19,170 | 33,000 | |
| Income before income tax | $146,970 | $110,000 | |
| Income tax expense | 57,510 | 44,000 | |
| Net income | $89,460 | $66,000 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $639,000 | % | $550,000 | % |
| Cost of goods sold | 325,890 | % | 308,000 | % |
| Gross profit | $313,110 | % | $242,000 | % |
| Selling expenses | 121,410 | % | 99,000 | % |
| Administrative expenses | 63,900 | % | 66,000 | % |
| Total operating expenses | $185,310 | % | $165,000 | % |
| Income from operations | $127,800 | % | $77,000 | % |
| Other income | 19,170 | % | 33,000 | % |
| Income before income tax | $146,970 | % | $110,000 | % |
| Income tax expense | 57,510 | % | 44,000 | % |
| Net income | $89,460 | % | $66,000 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $12,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
Tri-Comic Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1
Sales $440,000 $378,000
Cost of goods sold 228,800 215,460
Gross profit $211,200 $162,540
Selling expenses $83,600 $68,040
Administrative expenses 44,000 45,360
Total operating expenses $127,600 $113,400
Income from operations $83,600 $49,140
Other income 17,600 22,680
Income before income tax $101,200 $71,820
Income tax expense 39,600 30,240
Net income $61,600 $41,580
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
Tri-Comic Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent
Sales $440,000 % $378,000 %
Cost of goods sold 228,800 % 215,460 %
Gross profit $211,200 % $162,540 %
Selling expenses 83,600 % 68,040 %
Administrative expenses 44,000 % 45,360 %
Total operating expenses $127,600 % $113,400 %
Income from operations $83,600 % $49,140 %
Other income 17,600 % 22,680 %
Income before income tax $101,200 % $71,820 %
Income tax expense 39,600 % 30,240 %
Net income $61,600 % $41,580 %
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $20,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $729,000 | $627,000 | |
| Cost of goods sold | 328,050 | 313,500 | |
| Gross profit | $400,950 | $313,500 | |
| Selling expenses | $145,800 | $119,130 | |
| Administrative expenses | 72,900 | 75,240 | |
| Total operating expenses | $218,700 | $194,370 | |
| Income from operations | $182,250 | $119,130 | |
| Other income | 36,450 | 18,810 | |
| Income before income tax | $218,700 | $137,940 | |
| Income tax expense | 87,480 | 56,430 | |
| Net income | $131,220 | $81,510 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $729,000 | % | $627,000 | % |
| Cost of goods sold | 328,050 | % | 313,500 | % |
| Gross profit | $400,950 | % | $313,500 | % |
| Selling expenses | 145,800 | % | 119,130 | % |
| Administrative expenses | 72,900 | % | 75,240 | % |
| Total operating expenses | $218,700 | % | $194,370 | % |
| Income from operations | $182,250 | % | $119,130 | % |
| Other income | 36,450 | % | 18,810 | % |
| Income before income tax | $218,700 | % | $137,940 | % |
| Income tax expense | 87,480 | % | 56,430 | % |
| Net income | $131,220 | % | $81,510 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
Horton Manufacturing Inc. produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm’s profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow:
| Month | Maintenance Costs | Machine Hours | ||||
| 1 | $ | 2,720 | 1,974 | |||
| 2 | 2,767 | 2,094 | ||||
| 3 | 2,819 | 2,114 | ||||
| 4 | 2,925 | 2,180 | ||||
| 5 | 2,959 | 2,338 | ||||
| 6 | 3,114 | 2,476 | ||||
| 7 | 2,969 | 2,351 | ||||
| 8 | 3,010 | 2,377 | ||||
| 9 | 2,880 | 2,232 | ||||
| 10 | 2,662 | 1,857 | ||||
| 11 | 2,683 | 2,041 | ||||
| 12 | 2,994 | 1,876 | ||||
Required:
1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the "slope (unit variable cost)" rounded to 4 decimal places and all other calculations, to nearest whole dollar.)
2. Graph the data points to check for possible outliers and determine whether the points selected in requirement 1 are representative of the data. (To earn full credit for this graph you must plot all required points for each curve. While plotting the points a tool icon will pop up. You can use this to enter exact co-ordinates for your points as needed.)
3. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Do not round intermediate calculations, with the exception of MAPE for each month, which should be rounded to three decimal places. Input your final answer as a percentage rounded to 1 decimal place (i.e., .0540 = 5.40%).)
In: Accounting
Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $21,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $750,000 | $645,000 | |
| Cost of goods sold | 397,500 | 380,550 | |
| Gross profit | $352,500 | $264,450 | |
| Selling expenses | $142,500 | $116,100 | |
| Administrative expenses | 75,000 | 77,400 | |
| Total operating expenses | $217,500 | $193,500 | |
| Income from operations | $135,000 | $70,950 | |
| Other income | 22,500 | 19,350 | |
| Income before income tax | $157,500 | $90,300 | |
| Income tax expense | 60,000 | 38,700 | |
| Net income | $97,500 | $51,600 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $750,000 | % | $645,000 | % |
| Cost of goods sold | 397,500 | % | 380,550 | % |
| Gross profit | $352,500 | % | $264,450 | % |
| Selling expenses | 142,500 | % | 116,100 | % |
| Administrative expenses | 75,000 | % | 77,400 | % |
| Total operating expenses | $217,500 | % | $193,500 | % |
| Income from operations | $135,000 | % | $70,950 | % |
| Other income | 22,500 | % | 19,350 | % |
| Income before income tax | $157,500 | % | $90,300 | % |
| Income tax expense | 60,000 | % | 38,700 | % |
| Net income | $97,500 | % | $51,600 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting
4.
Vertical Analysis of Income Statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $23,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:
| Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $804,000 | $691,000 | |
| Cost of goods sold | 393,960 | 380,050 | |
| Gross profit | $410,040 | $310,950 | |
| Selling expenses | $160,800 | $131,290 | |
| Administrative expenses | 88,440 | 89,830 | |
| Total operating expenses | $249,240 | $221,120 | |
| Income from operations | $160,800 | $89,830 | |
| Other income | 48,240 | 41,460 | |
| Income before income tax | $209,040 | $131,290 | |
| Income tax expense | 80,400 | 55,280 | |
| Net income | $128,640 | $76,010 | |
Required:
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.
| Tri-Comic Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 Amount | 20Y2 Percent | 20Y1 Amount | 20Y1 Percent | |
| Sales | $804,000 | % | $691,000 | % |
| Cost of goods sold | 393,960 | % | 380,050 | % |
| Gross profit | $410,040 | % | $310,950 | % |
| Selling expenses | 160,800 | % | 131,290 | % |
| Administrative expenses | 88,440 | % | 89,830 | % |
| Total operating expenses | $249,240 | % | $221,120 | % |
| Income from operations | $160,800 | % | $89,830 | % |
| Other income | 48,240 | % | 41,460 | % |
| Income before income tax | $209,040 | % | $131,290 | % |
| Income tax expense | 80,400 | % | 55,280 | % |
| Net income | $128,640 | % | $76,010 | % |
2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses) as a percentage of sales. As a result, net income as a percentage of sales . The sales promotion campaign appears to have been . While selling expenses as a percent of sales slightly, the cost was more than made up for by sales.
In: Accounting