Maureen Company Has the Following Income Statement for the Year $\begin{array}{ll}\text { Sales } & \$ 1,562 \\\text { Cost of goods sold } & {806} \\\text { Gross profit } &{756}\end{array}$

question 104

Multiple Choice

Maureen Company has the following income statement for the year ending December 31,2016:
$\begin{array}{ll}\text { Sales } & \$ 1,562 \\\text { Cost of goods sold } & {806} \\\text { Gross profit } &{756}\end{array}$
Operating expenses:
$\begin{array}{ll}\text { Wage expense } & 110 \\\text { Depreciation expense } & 76 \\\text { Rent expense } & 36 \\\text { Miscellaneous expense } & \underline{70} \\\text { Total operating expenses } & \underline{292} \\\text { Operating income } & 464 \\\text { Income tax expense } & \underline{162} \\\text { Net income } & \$ 302\end{array}$
If Maureen Company prepares a common size income statement,what will they report for Wage expense?

• A) 7.0%
• B) 10.2%
• C) 34.4%
• D) 66.1%

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Definitions:

Marginal Cost

Marginal cost is the additional cost incurred by producing one more unit of a good or service, a critical concept for understanding production decisions.

Output Increment

The increase in output that results from employing an additional unit of input, reflecting the productivity of the input in the production process.

Pure Monopolist

A single seller in a market who has exclusive control over a particular good or service and is the only one to provide that good or service.

Marginal Revenue

The additional income received from selling one more unit of a good or service; typically used to determine optimal production levels.