A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement

This Year Last Year

Sales $ 8,000,000 $ 6,000,000 Cost of goods sold 4,984,000 3,516,000 Gross margin 3,016,000 2,484,000 Selling and administrative expenses: Selling expenses 1,480,000 1,092,000 Administrative expenses 712,000 618,000 Total expenses 2,192,000 1,710,000 Net operating income 824,000 774,000 Interest expense 96,000 84,000 Net income before taxes $ 728,000 $ 690,000

Members of the company’s board of directors are surprised to see that net income increased by only $38,000 when sales increased by two million dollars.

Required:

Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i. e., 0.1234 should be entered as 12.3).)

This Year Last Year

Sales % %

What is the relationship between marginal external cost, marginal social cost, and marginal private cost? a. marginal social cost equals marginal private cost plus marginal external cost. b. marginal private cost plus marginal social cost equals marginal external cost. c. marginal social cost plus marginal external cost equals marginal private cost. d. marginal external cost equals marginal private cost minus marginal social cost. marginal external cost a. is expressed in dollars, so it is not an opportunity cost b. is an opportunity cost borne by someone other than the producer c. is equal to two times the marginal private cost d. is a convenient economics concept that is not real

About time delivery co. incurred the following costs related to trucks and vans used in operating its delivery service: classify each of the costs as a capital expenditure or a revenue expenditure. 1. changed the oil and greased the joints of all the trucks and vans. 2. changed the radiator fluid on a truck that had been in service for the past four years. 3. installed a hydraulic lift to a van. 4. installed security systems on four of the newer trucks. 5. overhaul the engine on one of the trucks purchased three years ago. 6. rebuilt the transmission on one of the vans that had been driven 40,000 miles. the van was no longer under warranty. 7. removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication. 8. repaired a flat tire on one of the vans. 9. replaced a truck's suspension system with a new suspension system that allows for the delivery of heavier loads. 10. tinted the back and side windows of one of the vans to discourage theft of contents.

Which of the following is one of the advantages primarily associated with a performance appraisal? (a) it protects employees against discrimination on the basis of race. (b) it motivates employees to work on their shortcomings. (c) it encourages employees to play the role of the whistle-blower. (d) it accurately measures the resources of the firm.