The Following Are the Income Statements of the Hancock Company

question 11

Multiple Choice

The following are the income statements of the Hancock Company for two consecutive years. Increases in which expenses contributed to the net loss in Year 2?

• A) Cost of goods sold and selling expenses
• B) Selling expenses and administrative expenses
• C) Cost of goods sold and administrative expenses
• D) Administrative expenses

---

Definitions:

Two-Tier Wage System

An employment system where new employees are paid less than existing employees for doing the same job, often used to reduce costs.

Product Market

The marketplace where final goods or services are traded between sellers and buyers, focusing on competition, supply, and demand dynamics.

Customer Bases

The group of customers who repeatedly purchase the goods or services of a business.

State Laws

Regulations and legal standards established by individual states within a country, which govern various aspects of life, including employment and business operations.