McNally Industries Has a Condensed Income Statement as Shown Using Horizontal Analysis, Calculate the Amount and Percent Change for

question 201

Multiple Choice

McNally Industries has a condensed income statement as shown. $$\begin{array} { | l | l | l | } \hline & \text { year } 2 & \text { Year 1 } \\\hline \text { Sales } & \$ 198,000 & \$ 165,500 \\\hline \text { Total operating expenses } & 163,000 & 147,500 \\\hline \text { Net income } & 35,000 & 18,000 \\\hline\end{array}$$ Using horizontal analysis, calculate the amount and percent change for sales. Round to one decimal place.

• A) $32,500, 19.6%
• B) $18,000, 10.9%
• C) $35,000, 17.7%
• D) $17,000, 9.4%

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Definitions:

Graph

A visual representation of data designed to show the relationship between two or more variables.

Short-Run Economic Profit

The profit earned by a firm in the short term, potentially including both actual financial gains and opportunity costs.

Average Total Cost

The total cost of production divided by the quantity of output produced; a measure of per-unit cost.

Price

The amount of money required to purchase a good or service, determined by various factors including supply and demand.