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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 12
Determining the Cause of Decreasing Gross Profit
Fortune Brands, Inc., sells a variety of products including Titleist and Pinnacle golf balls, Footjoy golf shoes, and Master Lock padlocks. Like many other companies, Fortune Brands reported a drop in net sales from $7.6 billion in 2008 to $6.7 billion in 2009, and a drop in gross profit from $3.6 billion in 2008 to $3.5 billion in 2009. Based on these numbers, determine whether the drop in gross profit was caused by a decline in gross profit per sale, a decline in sales volume, or a combination of the two.
Fortune Brands, Inc., sells a variety of products including Titleist and Pinnacle golf balls, Footjoy golf shoes, and Master Lock padlocks. Like many other companies, Fortune Brands reported a drop in net sales from $7.6 billion in 2008 to $6.7 billion in 2009, and a drop in gross profit from $3.6 billion in 2008 to $3.5 billion in 2009. Based on these numbers, determine whether the drop in gross profit was caused by a decline in gross profit per sale, a decline in sales volume, or a combination of the two.
Explanation
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The following are the reasons for drop i...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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