• Directions: Click the Case Link above and use the information provided in Revolutionary Designs, Inc., Part B, to answer this question: What is the trend in Revolutionary Designs' gross profit margin between 20Y1 and 20Y3? (Express your calculation as a percentage and carry to two decimal places.)

This is a single choice question. Selections are automatically selected as you use arrow to move.

a.It increased in 20Y2, then decreased in 20Y3. b.It decreased in 20Y2, then increased in 20Y3. c.It has increased each year. d. It has decreased each year.

Revolutionary Designs, Inc. Balance Sheets (Common Size) in $000s) As At December 31 2043 2012 2011 ASSETS Current assets Cash and equivalents Accounts receivable $ $ $ 310 1.194 9.5 36.6 230 846 7.8 28.8 221 794 8.6 31.1 20.B 13.9 440 Raw materials Work in process Finished goods Total Inventory 501 452 146 1.099 15.4 13.9 4.5 33.7 611 409 156 172 10.8 5.3 40,0 Other current assets Total current assets 36 2.639 11 80.9 23 909 0.9 2.293 78.1 Gross fixed assets Less: Accumulated depreciation Net fixed assets 582 17.8 21.4 723 3.6 99 3.4 89 624 212 612 24.0 1.2 - 20 0.7 34 1.3 $ 3.261 100,0 $2.937 100.0 32.555 100.0 Patents and trademarks TOTAL ASSETS $ $ LIABILITIES AND EQUITY Current liabilities Current portion-LTD Notes payable Note payable Jack Newsome-subordinated Accounts payable Accrued expenses Other current liabilities Total current liabilities 190.6 810 24.8 200 6.1 1.053 32.3 288 8.8 190.6 775 26.4 200 6.8 834 207 19 745 200 551 155 12 0.7 29.2 7.8 21.6 2.381 Long-term debt Other noncurrent liabilities Total abilities - 2002 1.860 Owners' equity 2.546 715 219 3 3261 100.0 705 24.0 3 2937 100.0 3 695 272 2.555 100.0 TOTAL LIABILMES AND EQUITY 4 Commercial Loans to Small Business Online Omega Performance Corporation. A n d Revolutionary Designs, Inc. Part B Revolutionary Designs, Inc. Income Statements in 5000s) Years Ended December 31 2013 2011 $ $ Sales Cost of goods sold Gross profit $ 20Y2 7.506 6.377 1,129 8.010 6,328 1.682 6,515 5.473 1,042 706 1315 858 Selling general and administrative expenses Depreciation expense Interest expense Loss on disposition of fixed assets Other expense Net Income before taxes 208 Provision for income taxes Net income 108 $ 86