Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 13, Problem 10E
To determine
(a)
Introduction:
Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.
To calculate:
The gross profit percentage of the company.
To determine
(b)
Introduction:
Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.
To compare:
The above derived results with the results of previous year, where gross profit percentage for the previous year was 31.7%.
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Students have asked these similar questions
Russell Department Stores, Inc.
Income Statement Compared with Industry Average
Year Ended December 31, 2018
Russell
Industry Average
Net sales revenue
$780,000
100.0 %
Cost of goods sold
524,940
65.8
Gross Profit
255,060
34.2
Operating Expenses
162,240
19.7
Operating Income
92,820
14.5
Other Expenses
7,800
0.4
Net Income
85,020
14.1 %
MORE INFO: Russell/industry average
Total Assets
$480,000
100.0 %
total Liabilities
327,360
64.7
total Liabilities and Stockholders' Equity $480,000 100.0 %
SOLVE for % of total (round total to one decimal place x.x%)
Amount
Percent of total
Net Sales Revenue
780,000
Cost of goods sold
524,940
gross profit
255,060
operating expenses
162240
operating income
92820
other expenses
7800
The following income statement appears in the financial report of MERCADO Company for the year ending December 31, 2020:
MERCADO Company
Income Statement
For the year ending December 31. 2020
Sales
72,485,000.00
Cost of goods sold
Gross profit
39.866,750.00
32.618.250.00
Less: Operating expenses:
Variable selling expenses:
Salesmen's commissions
3,624,250.00
Communication expenses
1,812.125.00
Advertising and promotion
635.350.00
Representation expenses
215.385.00
Gas and oil - salesmen
1,285.000.00
Repairs and maintenance
1,150.000.00
3.722.110.00
Fixed selling expenses
Salaries and wages
4,225,000.00
Franchises and royalties
524,150.00
Office supplies and materials
555.000.00
Depreciation
963 300.00
6.267,450.00 14.989,560.00
Fixed administrative expenses
Salaries and wages
6.324,650.00
Employee benefits
316,490.00
Communications expenses
335,125.00
Office supplies and materials
275,150.00
Depreciation
325,500.00
104 250.00 7.681,165.00
9.947.525.00
Miscellaneous expenses
Operating…
Dollar General Corporation operates general merchandise stores that feature quality merchandise at low prices to meet the needs of middle-, low-, and fixed-income families in southern, eastern, and midwestern states. For the year ended January 31, 2014, the company reported averageinventories of $2,475 (in millions) and an inventory turnover of 4.89. Average total fixed assetswere $2,080 (million) and the fixed asset turnover ratio was 8.14.Required:1. Calculate Dollar General’s gross profit percentage (expressed as a percentage with one decimalplace). What does this imply about the amount of gross profit made from each dollar of sales?TIP: Work backward from the fixed asset turnover and inventory turnover ratios to compute theamounts needed for the gross profit percentage.2. Is this an improvement from the gross profit percentage of 31.7 percent earned during theprevious year?
Chapter 13 Solutions
Managerial Accounting
Ch. 13 - Prob. 1QCh. 13 - Prob. 2QCh. 13 - What is ratio analysis? Why is it useful?
Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5QCh. 13 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q
Ch. 13 - Prob. 1MCCh. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - Prob. 7MCCh. 13 - Prob. 8MCCh. 13 - Prob. 9MCCh. 13 - Prob. 1MECh. 13 - Prob. 2MECh. 13 - Prob. 3MECh. 13 - Prob. 4MECh. 13 - Prob. 5MECh. 13 - Prob. 6MECh. 13 - Prob. 7MECh. 13 - Prob. 8MECh. 13 - Prob. 9MECh. 13 - Prob. 10MECh. 13 - Prob. 11MECh. 13 - Prob. 12MECh. 13 - Prob. 13MECh. 13 - Prob. 14MECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Computing and Interpreting Liquidity Ratios...Ch. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Analyzing the Impact of Selected Transactions on...Ch. 13 - Prob. 15ECh. 13 - Prob. 1.1GAPCh. 13 - Prob. 1.2GAPCh. 13 - Prob. 2.1GAPCh. 13 - Prob. 2.2GAPCh. 13 - Prob. 2.3GAPCh. 13 - Prob. 2.4GAPCh. 13 - Prob. 2.5GAPCh. 13 - Prob. 2.6GAPCh. 13 - Prob. 2.7GAPCh. 13 - Prob. 2.8GAPCh. 13 - Prob. 3.1GAPCh. 13 - Prob. 3.2GAPCh. 13 - Prob. 3.3GAPCh. 13 - Prob. 4.1GAPCh. 13 - Prob. 4.2GAPCh. 13 - Prob. 4.3GAPCh. 13 - Prob. 5.1GAPCh. 13 - Prob. 5.2GAPCh. 13 - Prob. 5.3GAPCh. 13 - Prob. 5.4GAPCh. 13 - Prob. 6.1GAPCh. 13 - Prob. 6.2GAPCh. 13 - Prob. 7GAPCh. 13 - Prob. 1.1GBPCh. 13 - Prob. 1.2GBPCh. 13 - Prob. 2.1GBPCh. 13 - Prob. 2.2GBPCh. 13 - Prob. 2.3GBPCh. 13 - Prob. 2.4GBPCh. 13 - Prob. 2.5GBPCh. 13 - Prob. 2.6GBPCh. 13 - Prob. 2.7GBPCh. 13 - Prob. 2.8GBPCh. 13 - Prob. 3.1GBPCh. 13 - Prob. 3.2GBPCh. 13 - Prob. 3.3GBPCh. 13 - Prob. 4.1GBPCh. 13 - Prob. 4.2GBPCh. 13 - Prob. 4.3GBPCh. 13 - Prob. 5.1GBPCh. 13 - Prob. 5.2GBPCh. 13 - Prob. 5.3GBPCh. 13 - Prob. 5.4GBPCh. 13 - Prob. 6.1GBPCh. 13 - Prob. 6.2GBPCh. 13 - Prob. 7GBP
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