Two income statements for Danielle's Design Services are shown below:Danielle's Design ServicesIncome StatementFor Years 1 and 2 Ending December 31Year 2Year 1AFees earned$765,340$696,520Operating expenses:Wages expense$254,000$214,600Rent expense120,000108,00076,50098,715Supplies expenseMiscellaneous expenseTotal operating expenses11,68016,420$462,180$437,735Net income$303,160$258,785a. Prepare a vertical analysis of Danielle's Design Services income statements. Determine total operating expenses percentage by adding the expense percentages. Determine the net income percentage by deducting totaloperating expenses percentage from fees earned percentage. If required, round your percentages to one decimal place. Do not enter the percent sign.Danielle's Design ServicesIncome StatementsFor Years 1 and 2 Ending December 31Year 2 Year 2 Year 1 Year 1Amount Percent Amount Percent$765,340Fees earned%%$696,520Operating expenses:Wages expense254,000% 211,600120,000% 108,00076.500%98,715Rent experiscSupplics expenseMiscellancous expenscTotal operating expensesNet Income11%16,42011,680.$462,180$437.735T$303,160% $258,785b. What types of trends are indicuted: favorable or unfavorable?TheThe vertical analysis shows both favorable and unfavorable trends. Thein wages expense is iRent expense as a percentage of fees earned slayed relatively constant. The net result isin supplies expense and miscellaneous expense are latérin net income a porcentage of fees corned.%⁹⁰⁰1%%%-an

The total cost of production of a good comprises the total fixed cost of production and the total…

Answered: Danielle's Design Services Income…

Business

Accounting

Danielle's Design Services Income Statement

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 9SPB

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A vertical analysis of two income statements for Danielle's Design Services is shown below: Danielle's Design Services Income Statements For Years 1 and 2 Ending December 31 Year 2 Year 1 Amount Percent Amount Percent Fees earned $765,340 100.0% $696,520 100.0% Operating expenses: Wages expense $254,000 33.2% $214,600 30.8% Rent expense 120,000 15.7% 108,000 15.5% Supplies expense 76,500 10.0% 98,715 14.2% Miscellaneous expense 11,680 1.5% 16,420 2.4% Total operating expenses $462,180 60.4% $437,735 62.9%* Net income $303,160 39.6% $258,785 37.1%* *Differences due to rounding Which of the following analyses reflect the data given? a.Wages expense and miscellaneous expense show an unfavorable trend, and rent and supplies expenses show an unfavorable trend. b.Wages expense and rent expense show a favorable trend, while supplies and miscellaneous expenses show an unfavorable trend. c.Wages expense and rent expense show an unfavorable trend, while…
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