Presented are the income statements of Blackout and Pinecone heavy equipment manufacturing companies for the current year: Which company has the better relationship percentage-wise between selling and general expenses compared to net sales revenue?
A)Impossible to determine
B)Both have the same relationship
C)Blackout
D)Pinecone

Question

Presented are the income statements of Blackout and Pinecone heavy equipment manufacturing companies for the current year:  Which company has the better relationship percentage-wise between selling and general expenses compared to net sales revenue?
A)Impossible to determine 
B)Both have the same relationship 
C)Blackout 
D)Pinecone

Quizplus · Accepted Answer

The relationship between selling and general expenses to net sales revenue is calculated using the formula (selling and general expenses/net sales revenue)*100. For Blackout, this calculation gives (1,535/15,270)*100 = 10.05%. For Pinecone, the calculation gives (2,015/18,582)*100 = 10.85%. Therefore, Blackout has a better relationship percentage-wise between selling and general expenses compared to net sales revenue.

Presented Are the Income Statements of Blackout and Pinecone Heavy