Profit and loss data for Lota & Romy, Inc. for 2019 and 2020 follow: 2019 2020 Increase (Decrease) P762,000 Sales P2,688,000 P3,450,000 Cost of Sales 1,920,000 2,760,000 840,000 Gross Profit P768,000 P690,000 P(78,000) REQUIRED: 1. Prepare a statement/summary analyzing the variation in gross profit giving as much information as can be determined concerning factors responsible for the change, under each of the following independent assumptions: a. Total units sold in 2020 are 25% above units sold in 2019. b. Selling prices in 2020 are 20% above the selling prices in 2019. c. Cost prices in 2020 are 10% lower than the cost prices in 2019. d. No data are available relative to prices and volume changes.

Profit and loss data for Lota & Romy, Inc. for 2019 and 2020 follow: 2019 2020 Increase (Decrease) P762,000 Sales P2,688,000 P3,450,000 Cost of Sales 1,920,000 2,760,000 840,000 Gross Profit P768,000 P690,000 P(78,000) REQUIRED: 1. Prepare a statement/summary analyzing the variation in gross profit giving as much information as can be determined concerning factors responsible for the change, under each of the following independent assumptions: a. Total units sold in 2020 are 25% above units sold in 2019. b. Selling prices in 2020 are 20% above the selling prices in 2019. c. Cost prices in 2020 are 10% lower than the cost prices in 2019. d. No data are available relative to prices and volume changes.

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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