Items 20 through 24 are based on the following: The management of Bataan Corporation asked you to submit an analysis of the increase in their gross profit in 2021 based on their past two-year comnparative income statements which show: 2020 P1,000,000 800,000 P 200,000 2021 Sales P1,237,500 Cost of sales 950,000 P 287 000 Gross profit The only known factor given to you is the sales price increased 12.5% beginning January 2021.

Items 20 through 24 are based on the following: The management of Bataan Corporation asked you to submit an analysis of the increase in their gross profit in 2021 based on their past two-year comnparative income statements which show: 2020 P1,000,000 800,000 P 200,000 2021 Sales P1,237,500 Cost of sales 950,000 P 287 000 Gross profit The only known factor given to you is the sales price increased 12.5% beginning January 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The increase in gross profit due to increase in volume is:

a)P50,000

b) P35,000

c) P20,000

d) None of these

Items 20 through 24 are based on the following: The management of Bataan Corporation asked you to submit an
analysis of the increase in their gross profit in 2021 based on their past two-year comnparative income statements which
show:
2020
2021
P1,237,500
950,000
P 287 000
Sales
P1,000,000
800,000
P 200,000
Cost of sales
Gross profit
The only known factor given to you is the sales price increased 12.5% beginning January 2021.

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Step 1 Basic Information

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Step 2 Calculation of Gross profit ratio and ratio of cost of sales for both the year.

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Step 3 Calculation of selling price of 2021 and number of units sold in both the year

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Step 4 Analysis of increase in Gross profit

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Step 5 Conclusion of Analysis

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