-Based on Common Size Analysis, Which of the Following Statements

question 69

Multiple Choice

$\begin{array}{l}\text { Consider the following statement of earnings data for Mandrake Mills Inc. }\\\begin{array} { | l | r | r | } \hline & \mathbf { 2 0X7 } & \mathbf { 2 0 X 6 } \\\hline \text { Sales revenue } & \$ 97,300 & \$ 86,200 \\\hline \text { Less: Cost of goods sold } & \underline { 45,600 } & \underline { 53,400 } \\\hline \text { Gross profit } & 51,700 & 32,800 \\\hline \text { Selling and administration expense } & \underline { 22,500 } & \underline { 18,300 } \\\hline \text { Income before income tax } & \$ 29,200 & \$ 14,500 \\\hline\end{array}\end{array}$
-Based on common size analysis, which of the following statements is correct

• A) the increase in sales revenue in 20X7 was caused by higher selling and administrative expenses.
• B) the increase in gross pro?t in 20X7 was due to increased sales.
• C) income before income tax as a percent of sales declined in 20X1.
• D) the company's cost to sales ratio improved in 20X7.

---

Definitions:

Midsaggital

A plane that divides the body or an organ vertically into right and left halves; also known as the median plane.

Midsaggital Plane

An anatomical plane that divides the body or an organ vertically into equal right and left halves; also known as the median plane.

Thoracic Cavity

The compartment of the body located between the neck and the abdomen, housing organs such as the heart and lungs.

Spinal Cord

The spinal cord is a long, thin, tubular structure made up of nervous tissue that extends from the brainstem to the lower back, conducting signals between the brain and the body and controlling reflexes.