Question

Use the following information to do a horizontal analysis of Rae Company's income statement for the current year and prior year Current year Prior year $387,000$300.000 $68,000 $102.600$76.,800 $17.160 Dollar Change %Change Cost of goods sold $44,000 Gross profift $22,000 Net income What is the percentage change in cost of goods sold? OA. 54.55%. OB, 29% 77.52% C. OD, 35.29%

Answer 1

Answer:

B, 29%

Explanation:

Dollar change in cost of goods sold = Current year cost of goods sold - Prior year cost of goods sold

Dollar change in costs of goods sold = $387,000 - $300,000 = $87,000

Percentage change in cost of goods sold = Dollar change in cost of goods sold / Prior year cost of goods sold

Percentage change in cost of goods sold = $87,000 / $300,000 = 0.29