Below Is Some Information Taken from the Income Statements of RPG

question 160

Essay

Below is some information taken from the income statements of RPG Co.and RPM Co.
$\begin{array}{lrrr}\mathrm{RPG CO.}&\text { Year } 3&\text { Year } 2&\text { Year } 1\\\text { Net sales } & \$ 152,000 & 146,000 & \$ 140,000 \\\text { Cost of goods sold } & 115,000 & 110,000 & 107,000\\\text { Gross profit }&\$37,000&\$36,000&\$33,000\\\\\text { RPM Co. }\\\text { Net sales } & \$ 84,000 & \$ 83,000 & \$ 80,000 \\\text { Cost of goods sold } & 70,000 & 69,000 & 68,000 \\\text { Gross profit }&\$14,000&\$14,000&\$12,000\end{array}$
A) Using time series (or trend) analysis, comment on the trend of RPG’s cost of goods sold and gross profit.

B) Using cross sectional analysis, compare RPG’s gross profit to that of RPM.

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