Profit and loss data for Lota & Romy, Inc. for 2019 and 2020 follow: 2019 2020 Increase (Decrease) P762,000 Sales P2,688,000 P3,450,000 Cost of Sales 1,920,000 2,760,000 840,000 Gross Profit P768,000 P690,000 P(78,000) REQUIRED: 1. Prepare a statement/summary analyzing the variation in gross profit giving as much information as can be determined concerning factors responsible for the change, under each of the following independent assumptions: a. Total units sold in 2020 are 25% above units sold in 2019. b. Selling prices in 2020 are 20% above the selling prices in 2019. c. Cost prices in 2020 are 10% lower than the cost prices in 2019. d. No data are available relative to prices and volume changes.
Profit and loss data for Lota & Romy, Inc. for 2019 and 2020 follow: 2019 2020 Increase (Decrease) P762,000 Sales P2,688,000 P3,450,000 Cost of Sales 1,920,000 2,760,000 840,000 Gross Profit P768,000 P690,000 P(78,000) REQUIRED: 1. Prepare a statement/summary analyzing the variation in gross profit giving as much information as can be determined concerning factors responsible for the change, under each of the following independent assumptions: a. Total units sold in 2020 are 25% above units sold in 2019. b. Selling prices in 2020 are 20% above the selling prices in 2019. c. Cost prices in 2020 are 10% lower than the cost prices in 2019. d. No data are available relative to prices and volume changes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 6-22
Profit and loss data for Lota & Romy, Inc. for 2019 and 2020 follow:
2019
2020
Increase
(Decrease)
P762,000
Sales
P2,688,000
P3,450,000
Cost of Sales
1,920,000
2,760,000
840,000
Gross Profit
P768,000
P690,000
P(78,000)
REQUIRED:
1. Prepare a statement/summary analyzing the variation in gross profit giving as
much information as can be determined concerning factors responsible for the
change, under each of the following independent assumptions:
a. Total units sold in 2020 are 25% above units sold in 2019.
b. Selling prices in 2020 are 20% above the selling prices in 2019.
c. Cost prices in 2020 are 10% lower than the cost prices in 2019.
d. No data are available relative to prices and volume changes.
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