What is a common-size statement? Why are these statements useful?
What will be an ideal response?
A common-size statement is a financial statement that reports only percentages. This removes
dollar value bias when comparing one company to another company. Dollar value bias is the bias one
sees from comparing numbers in absolute dollars rather than relative percentage terms.
You might also like to view...
An advantage of a recovery operations center is that
a. this is an inexpensive solution b. the initial recovery period is very quick c. the company has sole control over the administration of the center d. none of the above are advantages of the recovery operations center
Which account that does not appear on the balance sheet has an amount in the Balance Sheet columns of a work sheet?
a. Dividends b. Depreciation Expense c. Retained Earnings d. Accumulated Depreciation–Equipment
In using the total cost concept of applying the cost-plus approach to product pricing, selling expenses, administrative expenses, and profit are covered in the markup
Indicate whether the statement is true or false
Knapp Roofing Company has estimated the following amounts for its next fiscal year
Total fixed costs $840,000 Sale price per unit 80 Variable cost per unit 30 If the company spends an additional $35,000 on advertising, sales volume would increase by2,500 units. What effect will this decision have on the operating income of Evans? A) Operating income will decrease by $90,000. B) Operating income will increase by $90,000. C) Operating income will increase by $200,000. D) Operating income will increase by $125,000.