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A vertical analysis of two income statements for Danielle's Design Services is shown below: Danielle's Design Services Income Statements For Years 1 and 2 Ending
A vertical analysis of two income statements for Danielle's Design Services is shown below: Danielle's Design Services Income Statements For Years 1 and 2 Ending December 31 Year 2 Year 1 Amount Percent Amount Percent Fees earned $765,340 100.0% $696,520 100.0% Operating expenses: Wages expense $254,000 33.2% $214,600 30.8% Rent expense 15.7% 108,000 15.5% 120,000 76,500 Supplies expense 10.0% 98,715 14.2% Miscellaneous expense 11,680 1.5% 16,420 2.4% Total operating expenses $462,180 60.4% $437,735 62.9%* Net income $303,160 39.6% $258,785 37.1%* *Differences due to rounding Which of the following analyses reflect the data given? a. Wages expense and supplies expense show a favorable trend, while rent and miscellaneous expenses show an unfavorable trend. b. Wages expense and rent expense show an unfavorable trend, while supplies and miscellaneous expenses show a favorable trend. c. Wages expense and miscellaneous expense show an unfavorable trend, and rent and supplies expenses show an unfavorable trend. d. Wages expense and rent expense show a favorable trend, while supplies and miscellaneous expenses show an unfavorable trend
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