Donna Drysdale, co-owner of Drysdale Pizza, provides you with the following information for 2015 and 2016. Conduct a vertical analysis (common-size income statement) for the income statements. This question is divided into three parts: Part 1   2014 2015 2014% 2015% Change in % Revenues:           Food 800,000 850,000       Other 50,000 60,000 5.88 6.59 0.71 Total Revenues     100 100 0 Cost of Sales:           Food 160,000 170,000 88.89 87.63 -1.26 Other 20,000 24,000 11.11 12.37 1.26 Total cost of Sales 180,000 194,000 21.18 21.32 0.14 Gross Profit:           Food 640,000 680,000       Other 30,000 36,000 3.53 3.96 0.43 Total Gross Profit 670,000 716,000 78.82 78.68 -0.14 Operating (Controllable)Expenses:           Salaries and Wages 160,000 170,000 18.82 18.68 -0.14 Employee Benefits 50,000 55,000 5.88 6.04 0.16 Other 150,000 170,000       Total Operating Expenses 360,000 395,000 42.35 43.41 1.05 Operating Income           Other(Non-Controllable)Expenses:           Depreciation 80,000 80,000 9.41 8.79 -0.62 Interest Expense 80,000 75,000 9.41 8.24 -1.17 Occupation Costs 40,000 45,000       Total Non-controllable Expenses 200,000 200,000 23.53 21.98   Income before Income Taxes     12.94 13.30 0.36 Interest Taxes 30,000 35,000 3.53 3.85 0.32 Net Income 80,000 86,000 9.41 9.45 0.04

Principles of Accounting Volume 2
19th Edition
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Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 8PA: The following revenue data were taken from the December 31, 2017, Coca-Cola annual report (10-K):...
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Donna Drysdale, co-owner of Drysdale Pizza, provides you with the following information for 2015 and 2016. Conduct a vertical analysis (common-size income statement) for the income statements.

This question is divided into three parts: Part 1

  2014 2015 2014% 2015% Change in %
Revenues:          
Food 800,000 850,000      
Other 50,000 60,000 5.88 6.59 0.71
Total Revenues     100 100 0
Cost of Sales:          
Food 160,000 170,000 88.89 87.63 -1.26
Other 20,000 24,000 11.11 12.37 1.26
Total cost of Sales 180,000 194,000 21.18 21.32 0.14
Gross Profit:          
Food 640,000 680,000      
Other 30,000 36,000 3.53 3.96 0.43
Total Gross Profit 670,000 716,000 78.82 78.68 -0.14
Operating (Controllable)Expenses:          
Salaries and Wages 160,000 170,000 18.82 18.68 -0.14
Employee Benefits 50,000 55,000 5.88 6.04 0.16
Other 150,000 170,000      
Total Operating Expenses 360,000 395,000 42.35 43.41 1.05
Operating Income          
Other(Non-Controllable)Expenses:          
Depreciation 80,000 80,000 9.41 8.79 -0.62
Interest Expense 80,000 75,000 9.41 8.24 -1.17
Occupation Costs 40,000 45,000      
Total Non-controllable Expenses 200,000 200,000 23.53 21.98  
Income before Income Taxes     12.94 13.30 0.36
Interest Taxes 30,000 35,000 3.53 3.85 0.32
Net Income 80,000 86,000 9.41 9.45 0.04
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