Gross Profit The following gross profit data are taken from the financial records of the Eckhardt Company:
|
2007 |
2008 |
|
|
Sales |
$300,000 |
$296,000 |
|
Cost of goods sold |
200,000 |
203,300 |
|
Gross profit |
$100,000 |
$92,700 |
Required
1. If it is known that volume declined 5% from 2007 to 2008, by how much did selling prices change?
2. If it is known that volume declined 5% from 2007 to 2008, by how much did costs change?
3. If selling prices increased 4% from 2007 to 2008, what effect would this factor alone have on gross profit?
4. If costs increased by 7% from 2007 to 2008, what effect would this factor have on gross profit?