Managerial Accounting
Managerial Accounting
6th Edition
ISBN: 9781259726972
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 4, Problem 3AA
To determine

(1)

Introduction:

The cost of cost to revenues can be determined by dividing cost (including cost of sales as well as selling and administrative expenses) by revenues generated in that year.

To compute:

The cost to revenue ratio of the company for the year 2017.

To determine

(2)

Introduction:

The cost of cost to revenues by dividing cost (including cost of sales as well as selling and administrative expenses) by revenues generated in that year.

To compute:

The cost to revenue ratio of the company for the year 2016.

To determine

(3)

Introduction:

The ratio cost to revenue is necessary to calculate as it indicates opportunities for activity-based costing to reduce the cost and improve efficiency.

To compare: The company’s cost to revenue ratio was higher in 2016 or 2017.

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