The income statement of Carlson Company for the year ended March 31,2012 are as follows: (in million of pesos) 2012 2011SalesP 320.5P305.4Cost of sales274.1253.9Gross profit46.451.5Distribution costs11.610.4Administrative expenses22.623.5Other operating income4.56.4Earnings before interest and taxes16.724.0.Interest charges1.94.3.Earnings before taxes14.819.7 Which of the following is correct?a. The company sold more goods by volume in 2012 than in 2011.b. The gross margin as a percentage of sales was higher in 2012 than in 2011.c. The increase in distribution costs in 2012 over and above the 2011 amount isdue to the higher sales turnover.d. The net profit margin as a percentage of sales fell in 2012 and about 2/3 ofthe 2011 level.

Answer: a. The company sold more goods by volume in 2012 than in 2011. The statement is correct.…

Answered: The income statement of Carlson Company…

Managerial Accounting: The Cornerstone of Business Decision-Making

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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

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Problem 51E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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The income statement of Carlson Company for the year ended March 31,
2012 are as follows:

	(in million of pesos)
	2012	2011
Sales	P 320.5	P305.4
Cost of sales	274.1	253.9
Gross profit	46.4	51.5
Distribution costs	11.6	10.4
Administrative expenses	22.6	23.5
Other operating income	4.5	6.4
Earnings before interest and taxes	16.7	24.0
.Interest charges	1.9	4.3
.Earnings before taxes	14.8	19 .7

Which of the following is correct?
a. The company sold more goods by volume in 2012 than in 2011.
b. The gross margin as a percentage of sales was higher in 2012 than in 2011.
c. The increase in distribution costs in 2012 over and above the 2011 amount is
due to the higher sales turnover.
d. The net profit margin as a percentage of sales fell in 2012 and about 2/3 of
the 2011 level.

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