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

B. 37.8%, 10.8%, 162.5%

Step-by-step explanation:

1. Changes in Net Sales

We know,

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

`(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 =
`(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 =
`(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 =
`(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 =
`(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 =
`(21,000 - 8,000)/(8,000)`

Percentage changes in Gross Profit = 162.5%

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