Question
Butler Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Butler Sales Company's income statements
Butler Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Butler Sales Company's income statements for the last two years are given below: Units sold................................................... This Year 200,000 Last Year 160,000 Sales revenue ............................................. $1,000,000 $800,000 Less cost of goods sold.............................. 700,000 560,000 Gross margin ............................................. 300,000 240,000 Less operating expenses ............................ 210,000 198,000 Net operating income ................................ $ 90,000 $ 42,000 Operating expenses are a mixture of fixed costs and variable and mixed costs that vary with respect to the number of units sold.
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