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 determine the better relationship percentage-wise between selling and general expenses compared to net sales revenue, we need to calculate the ratio of selling and general expenses to net sales revenue for both companies. 
For Ritman: (Selling and General Expenses / Net Sales Revenue) * 100 = (253,000 / 2,150,000) * 100 = 11.77%
For Taylor: (Selling and General Expenses / Net Sales Revenue) * 100 = (408,000 / 3,850,000) * 100 = 10.61%
Therefore, Ritman has a higher percentage of selling and general expenses compared to net sales revenue, indicating that they are less efficient in managing their expenses than Taylor.

Presented Are the Income Statements of Ritman and Taylor Publications