A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year $8,000, 000 _ 4,984,000 3,016,000 Last Year Sales $6,000,000 3,516,000 2,484,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense 1,092,000 618,000 1,710,000 774,000 1,480,000 712,000 2,192,000 824,000 96,000 84,000 $ 690,000 Net income before taxes $ 728,000 Members of the company's board of directors are surprised to see that net income increased by only $38,000 when sales increased by $2,000,000. Reguired:-

A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year $8,000, 000 _ 4,984,000 3,016,000 Last Year Sales $6,000,000 3,516,000 2,484,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense 1,092,000 618,000 1,710,000 774,000 1,480,000 712,000 2,192,000 824,000 96,000 84,000 $ 690,000 Net income before taxes $ 728,000 Members of the company's board of directors are surprised to see that net income increased by only $38,000 when sales increased by $2,000,000. Reguired:-

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...

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