1. Assume a company's Income Statement for Year 12 is as follows:

Income Statement Data
Year 12
(in 000s)
Net Revenues from Footwear Sales
$ 280,000
Cost of Pairs Sold
150,000
Warehouse Expenses
15,000
Marketing Expenses
35,000
Administrative Expenses
8,000
Operating Profit (Loss)
72,000
Interest Income (expenses)
(10,000)
Pre-tax Profit (Loss)
62,000
Income Taxes
18,600
Net Profit (Loss)
$ 43,400

Based on the above income statement data (assume interest income is zero), the company's interest coverage ratio is

28.0.

280.0.

4.34.

7.20.

6.20
2.
Which of the following statements about striving to reduce labor costs per pair produced at each of the company's plants is true?

The most cost effective way for a company …show more content…

8% or $2,400,000.

5% or $1,500,000.

15% or $4,500,000.

4% or $1,200,000.
Assume a company's Income Statement for Year 12 is as follows:

Income Statement Data
Year 12
(in 000s)
Net Revenues from Footwear Sales
$ 280,000
Cost of Pairs Sold
150,000
Warehouse Expenses
15,000
Marketing Expenses
35,000
Administrative Expenses
8,000
Operating Profit (Loss)
72,000
Interest Income (expenses)
(10,000)
Pre-tax Profit (Loss)
62,000
Income Taxes
18,600
Net Profit (Loss)
$ 43,400

Based on the above data, which of the following statements is false?

Interest expenses are 3.6% of net revenues.

Warehouse expenses are 5.4% of net revenues.

Administrative expenses are 2.9% of net revenues.

Marketing costs are 10.9% of net revenues.

Cost of pairs sold are 53.6% of net revenues.
8.
According to the cost allocation procedures discussed on the Help screens for the Private Label Sales Report and the Marketing and Admin Report, which one of the following is included as part of a company's cost in supplying private-label footwear to chain retailers?

A proportionate share of corporate administrative expenses

A proportionate share of companywide costs for celebrity endorsement contracts

A proportionate share of plant supervision costs, plant