Question

Zebra Company reports the following figures for the years ending December 31, 2017 and 2016: What are the percentage changes from 2016 to 2017 for Net Sales, Cost of Goods Sold and Gross Profit, respectively? (Round your final answers to one decimal place, X.X%) A. 100%, 162.5%, 10.8% B. 37.8%, 10.8%, 162.5% C. 100%, 0.9%, 0.4% D. 162.5%, 37.8%, 10.8%

Answer 1

Answer:

B. 37.8%, 10.8%, 162.5%

Explanation:

1. Changes in Net Sales

We know,

Percentage changes in Net sales from previous year to current year =

$\frac{2017 Net income - 2016 Net income}{2016 Net income}$

Given,

$Net Sales_{2017}$ = $62,000

$Net Sales_{2016}$ = $45,000

Therefore,

Percentage changes in Net Sales = $\frac{62,000 - 45,000}{45,000}$

Percentage changes in Net Sales = 37.8% (Rounded to 1 decimal Places)

Therefore, Net sales changes 37.8% from 2016 to 2017.

2. Changes in Cost of Goods sold

We know,

Percentage changes in Cost of goods sold from previous year to current year = $\frac{2017 COGS - 2016 COGS}{2016 COGS}$

Given,

$COGS_{2017}$ = $41,000

$COGS_{2016}$ = $37,000

Putting the value in the above formula,

Percentage changes in COGS = $\frac{41,000 - 37,000}{37,000}$

Percentage changes in COGS = 10.8%

Therefore, Cost of goods sold changes 10.8% from 2016 to 2017.

3. Changes in Gross Profit

We know,

Percentage changes in Gross Profit from previous year to current year = $\frac{2017 Gross Profit - 2016 Gross Profit}{2016 Gross Profit}$

Given,

$Gross Profit_{2017}$ = $21,000

$Gross Profit_{2016}$ = $8,000

Hence,

Percentage changes in Gross Profit = $\frac{21,000 - 8,000}{8,000}$

Percentage changes in Gross Profit = 162.5%

Therefore, Gross Profit changes 162.5% from 2016 to 2017.