Freddy’s Fried Chicken provides the following for the months of April and May:

Complete the following:

a. Convert the income statement to common-size vertical analysis.

b. Convert the income statement to a comparative horizontal analysis.

c. With the information given, calculate the average check, cost, and operating income per guest. A total of 20,000 guests were served in April and 22,000 in May, comment on Freddy’s operating results for the two months of April and May.

d. Compare the information you received from the common-size vertical analysis and the comparative horizontal analysis.LO1

Transcribed Image Text:

Sales Revenue Sales revenue-food Sales revenue-beverages April $199,000 May $213,500 72,000 Total Sales Revenue $271,000 74,000 $287,500 Operating Expenses Cost of sales-food $ 71,500 $ 82,000 Cost of sales-beverage Wages expense Other operating expenses Total expenses Operating Income (BT) 16,800 19,900 76,000 77,100 $241,400 85,000 82,000 $268,900 $ 29,600 $ 18,600