2.2 Develop a profit-and-loss statement for a company that had $50 million in net saleslast year. Cost of goods sold represents 45% of net sales. Marketing expenses in-clude selling expenses, promotion expenses, and freight. Selling expenses includesales salaries totaling $2 million per year and sales commissions (10% of sales). Thecompany spent $2 million on advertising last year, and freight costs were 5% of sales.Other costs include $500,000 for managerial salaries and expenses for the marketingfunction and another $2 million for indirect overhead allocated to the division.

Profit and loss statement: This is a financial report that gives a summary of the company's revenue,…

Answered: Develop a profit-and-loss statement for…

Develop a profit-and-loss statement for a company that had $50 million in net sales last year. Cost of goods sold represents 45% of net sales. Marketing expenses in-

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 14P

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Question

2.2 Develop a profit-and-loss statement for a company that had $50 million in net sales
last year. Cost of goods sold represents 45% of net sales. Marketing expenses in-
clude selling expenses, promotion expenses, and freight. Selling expenses include
sales salaries totaling $2 million per year and sales commissions (10% of sales). The
company spent $2 million on advertising last year, and freight costs were 5% of sales.
Other costs include $500,000 for managerial salaries and expenses for the marketing
function and another $2 million for indirect overhead allocated to the division.

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