Ash Company reported sales of $400,000 for Year 1, $450,000 for Year 2, and $500,000 for Year 3. Using Year 1 as the base year, what is the revenue trend percent for Years 2 and 3?

Question

Quizplus · Accepted Answer

To calculate the revenue trend percent, we need to find the percentage increase or decrease in revenue from the base year to the subsequent years.

For Year 2:
Percentage increase in revenue = ((Revenue for Year 2 - Revenue for Year 1) / Revenue for Year 1) x 100%
= (($450,000 - $400,000) / $400,000) x 100%
= 12.5%
Therefore, the revenue trend percent for Year 2 is 112.5% (100% + 12.5%).

For Year 3:
Percentage increase in revenue = ((Revenue for Year 3 - Revenue for Year 1) / Revenue for Year 1) x 100%
= (($500,000 - $400,000) / $400,000) x 100%
= 25%
Therefore, the revenue trend percent for Year 3 is 125% (100% + 25%).

Thus, the best choice is D, 112.5% for Year 2 and 125% for Year 3.

Ash Company Reported Sales of $400,000 for Year 1, $450,000