A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement
This Year Last Year
Sales $ 8,000,000 $ 6,000,000 Cost of goods sold 4,984,000 3,516,000 Gross margin 3,016,000 2,484,000 Selling and administrative expenses: Selling expenses 1,480,000 1,092,000 Administrative expenses 712,000 618,000 Total expenses 2,192,000 1,710,000 Net operating income 824,000 774,000 Interest expense 96,000 84,000 Net income before taxes $ 728,000 $ 690,000
Members of the company’s board of directors are surprised to see that net income increased by only $38,000 when sales increased by two million dollars.
Required:
Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i. e., 0.1234 should be entered as 12.3).)
This Year Last Year
Sales % %
Cost of goods sold % %
Gross margin % %
Selling and administrative expenses:
Selling expenses % %
Administrative expenses % %
Total selling and administrative expenses % %
Net operating income % %
Interest expense % %
Net income before taxes % %