ZAB Corporation reports the following for 2023:

• Sales Revenue: $1,100,000
• Cost of Goods Sold: $700,000
• Administrative Expenses: $130,000
• Selling Expenses: $90,000
• Interest Expense: $35,000
• Tax Expense: $50,000

Requirements:

1. Create an income statement.
2. Calculate the gross profit margin.
3. Calculate the operating profit margin.
4. Calculate the net profit margin.
5. Analyze the impact of a 5% increase in both sales and COGS on the net profit margin.

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Company ABC Analysis

• Beginning Inventory: $25,000
• Net Purchases: $130,000
• Ending Inventory: $35,000
• Sales Revenue: $200,000
• Operating Expenses: $30,000

Requirements:

1. Calculate the Cost of Goods Sold (COGS).
2. Prepare an income statement.
3. Calculate the gross profit and gross profit margin.
4. Calculate the operating profit margin.
5. Analyze how changes in sales revenue could impact the operating profit margin.