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An abbreviated common-size income statements for Year 1's actual results and Year 2's anticipated results are shown below Year 1 100% Year 2 100% 50%

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An abbreviated common-size income statements for Year 1's actual results and Year 2's anticipated results are shown below Year 1 100% Year 2 100% 50% Sales Cost of goods sold Selling and administrative expenses Operating Income The corporation estim ates that units sold wil increase by 5% in Year 2 with no proe increase to its customers and no anticipated cost increases from its vendors Assume selling and administrative expenses are 596 variable and 9 % food If all predictions materialize, the corporation should expect selling and administrative expenses in Year 2 to be 50% 40% ? 10% ? o A. OB, Greater than 42% of sales 40% of sales Greater than 40% but no more than 42% of sales Less than 40% of sales C. 0 D

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