A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Stat
ement This Year Last Year Sales $ 7,380,000 $ 5,608,800 Cost of goods sold 4,630,000 3,512,500 Gross margin 2,750,000 2,096,300 Selling and administrative expenses: Selling expenses 1,371,000 1,076,500 Administrative expenses 711,000 609,000 Total expenses 2,082,000 1,685,500 Net operating income 668,000 410,800 Interest expense 102,000 92,000 Net income before taxes $ 566,000 $ 318,800 Members of the company’s board of directors are surprised to see that net income increased by only $247,200 when sales increased by $1,771,200.
Required:
1. 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).)
Required:
1. 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).)
1 answer:
You might be interested in
Please find full question attached
Answer and Explanation:
I will use Apple and HP in this comparison.Here I would compare Apple's laptop to that of Hewlet Packard as this is where they meet in the industry. Apple employs a strategy of differentiation and standing out in competition through their products. They aim to create products that are quite different and unique/innovative from other products in the market, and yet what the customer wants. In doing this, Apple has a trade-off for cost as they charge alot higher for their products than their competitors. HP on the other hand focus on making the best possible products that get the job done/meet the needs of customers while also being affordable. HP is more focused on affordable devices for their market and therefore have a different market segment for laptops from that of Apple. There is a trade-off for cost and market segment in this comparison
