Question

Christy Burch and Myung Lim, partners, compared their current income statement with their income statement of a year ago. They noted that sales were 12.0% higher than a year ago. They also noted that the total expenses were 20.0% higher than a year ago. What type of analysis should be done to determine whether the increase in expenses is justified? Explain your answer

Answer 1

Christy Burch and Myung Lim, business managers, compared their current income statement with the income statement of a year ago. They noted that sales were 12.0% higher than a year ago. They also noted that the total expenses were 20.0% higher than a year ago. What type of analysis should be done to determine whether the increase in expenses is justified?