Use the Following Information to Do a Horizontal Analysis of Magic

question 143

Multiple Choice

Use the following information to do a horizontal analysis of Magic Corporation's income statement for the current year and prior year: $$\begin{array} { | l | l | l | l | l | } \hline \text { Account } & \text { Current year } & \text { Priar year } & \text { Dollar Change } & \text { \% Change } \\\hline \text { Cost af good sold } & \$ 375,000 & \$ 300,000 & & \\\hline \text { Selling/general exp } & \$ 60,000 & \$ 40,000 & & \\\hline \text { Gross prafit } & \$ 102,600 & \$ 76,000 & & \\\hline \text { Net incarne } & \$ 17,600 & \$ 22,000 & & \\\hline\end{array}$$
- What is the dollar change in gross profit?

• A)$20,000
• B)$(4,000)
• C)$26,600
• D)$178,600

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Definitions:

Downward-Sloping Demand

A concept in economics that indicates demand for a good or service decreases as its price increases, assuming all other factors remain constant.

Output

The amount of goods or services produced by a company, industry, or economic system.

Price Searchers

Price searchers are businesses or sellers who determine the sale price of their products or services based on market conditions, rather than fixed prices.

Price Leaders

Price leaders are companies that dominate their sector and can influence the market price of goods or services by setting a price others follow.