Presented are the income statements of Ritman and Taylor Publications companies for the current year: Which company has the better relationship percentage-wise between selling and general expenses compared to net sales revenue?

Question

Presented are the income statements of Ritman and Taylor Publications companies for the current year:  Which company has the better relationship percentage-wise between selling and general expenses compared to net sales revenue?

Quizplus · Accepted Answer

To compare the relationship between selling and general expenses and net sales revenue, we need to calculate the ratio of (selling and general expenses/net sales revenue)*100.

For Ritman, the ratio is (139,000 + 32,000)/1,160,000 * 100 = 13.16%
For Taylor, the ratio is (127,000 + 31,000)/1,040,000 * 100 = 14.42%

Therefore, Ritman has a better relationship percentage-wise between selling and general expenses compared to net sales revenue.

Presented Are the Income Statements of Ritman and Taylor Publications