Comparative Statements for Warmer Corporation Are Shown Below:
Warmer Corporation

question 178

Essay

Comparative statements for Warmer Corporation are shown below:
Warmer Corporation Comparative Income Statements For the years ended December 31
$\begin{array}{|l|r|r|r|}\hline&2018&2017&2016\\\hline \text { Sales } & \$ 14,800 & \$ 13,229 & \$ 13,994 \\\hline \text { Cost of goods sold } & 8,225 & 8,661 & 8,375 \\\hline \text { Gross profit } & 6,575 & 4,568 & 5,619 \\\hline \text { Operating expenses } & 3,664 & 3,576 & 3,487 \\\hline \text { Operating income } & \$ 2,911 & \$ 992 & \$ 2,132\end{array}$ Calculate trend percentages for all income statement amounts shown and comment on the results. Use 2016 as the base year.Comment on the results.

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Definitions:

Variable Overhead

Costs that fluctuate with the level of production or business activity, such as utilities or raw materials.

Rate Variance

The difference between the expected standard cost and the actual cost incurred, calculated for direct labor rate, overhead rate, or material price.

Standard Direct Labor-Hours

The estimated hours required to produce a units based on standard efficiency and productivity levels.

Labor Efficiency Variance

The difference between the actual hours worked to produce a good or service and the standard hours expected, multiplied by the standard labor rate.