What Is the Formula Managers Use to Calculate a Percentage

question 26

Multiple Choice

What is the formula managers use to calculate a percentage variance when comparing last year's profits to this year's profits?

• A) (Profits This Year − Profits Last Year) ÷ Profits Last Year = % Variance
• B) (Profits Last Year − Profits This Year) ÷ Profits This Year = % Variance
• C) (Profits This Year − Profits Last Year) x Profits Last Year = % Variance
• D) (Profits Last Year − Profits This Year) x Profits This Year = % Variance

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Definitions:

Appropriate Code Letter

A specific letter or abbreviation designated to represent a particular category or item in accounting or data classification.

Merchandise

Goods bought and sold by a business in the ordinary course of its trading activity.

Credit

An accounting entry that increases liabilities or equity or decreases assets, or an arrangement to receive cash, goods, or services now and pay for them in the future.

Credit Sales

Transactions where goods or services are sold to a customer with an agreement to pay at a later date.