Fancy Footwear is a premier designer and manufacturer of designer shoes for women. Over the past two years, they have concerted a lot of effort into both their boots and heels divisions. The results of their efforts are shown here: Management is interested in analyzing this data. What is the percent change in gross profit for both the Boots and Heels divisions from Year 1 to year 2? (Use parentheses around a number to indicate a negative value or loss.)
A) Boots: (29.15%), Heels: (26.75%)
B) Boots: (26.75%), Heels: (29.15%)
C) Boots: 36.52%, Heels: 41.13%
D) Boots: 41.13%, Heels: 36.52%

Question

Fancy Footwear is a premier designer and manufacturer of designer shoes for women. Over the past two years, they have concerted a lot of effort into both their boots and heels divisions. The results of their efforts are shown here:  Management is interested in analyzing this data. What is the percent change in gross profit for both the Boots and Heels divisions from Year 1 to year 2? (Use parentheses around a number to indicate a negative value or loss.)
A) Boots: (29.15%), Heels: (26.75%) 
B) Boots: (26.75%), Heels: (29.15%) 
C) Boots: 36.52%, Heels: 41.13% 
D) Boots: 41.13%, Heels: 36.52%

Quizplus · Accepted Answer

This question requires familiarity with manipulating data in Excel. To calculate the change in gross profit, you must first calculate the Gross Profits for Years 1 and 2. Create a new column with rows for Boots and Heels, and in the cells to the right of those columns, you will calculate the gross profit for Boots for Year 1. Use the following formula: "Year 1 Sales - Year 1 Cost of Goods Sold (COGS)", or =B2-B6 for a result of $38,009. Now, do the same for Year 2 in a new cell using the following formula: "Year 2 Sales - Year 2 COGS", or =C2-C6 for a result of $53,644. To calculate the percent change in gross profit for Boots, use the following formula: "(Year 2 Gross Profit - Year 1 Gross Profit)/Year 1 Gross Profit" that should give an answer of 41.13% increase in Year 2. Repeat this process for Heels, and you should get an answer of 36.52% increase in Year 2 (Choice D).

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