Revenue and Expense Data for Bluestem Company Are as Follows

question 141

Essay

Revenue and expense data for Bluestem Company are as follows: $$\begin{array} { l r r } & \text { Year } 2 & \text { Year } 1 \\\text { Administrative expenses } & \$ 37,000 & \$ 20,000 \\\text { Cost of goods sold } & 350,000 & 320,000 \\\text { Income tax expense } & 40,000 & 32,000 \\\text { Sales } & 800,000 & 700,000 \\\text { Selling expenses } & 150,000 & 110,000\end{array}$$ ​ (a) Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales.
(b) Comment upon significant changes disclosed by the comparative income statement. Round percentages to one decimal place.

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Definitions:

Factor Analysis

A statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors.

Cluster Together

The act of grouping a set of objects in such a way that objects in the same group are more similar to each other than to those in other groups.

Correlation

A statistical measure that expresses the extent to which two variables change together, indicating the strength and direction of their relationship.

MANOVA

Multivariate Analysis of Variance, a statistical test used to compare the means of multiple dependent variables across one or more independent variable groups.