om/courses/14736/quizzes/78511/take/questions/1934518 The 2016 Income Statement

Question

om/courses/14736/quizzes/78511/take/questions/1934518 The 2016 Income Statement for Odyssey Enterprises, Inc., appears below. Odyssey's marketing department forecasts sales of $4,120,000 for 2017. Use a simple percent of sales calculation to estimate Odyssey's general and administrative expenses for 2017. 2016 $3,432,000 2,864,000 Sales Cost of Goods Sold General and administrative expenses 340,000 18,900 3,222,900 209,100 62,500 146.600 58,640 $87,960 Depreciation. Total operating costs EBIT Interest expense Pre-tax earnings Taxes (40%) . Net income $3,187.785.55 1.047.212.27

Explanation / Answer

For 2016 general and administrative expenses are :
340,000/3,432,000 of sales
i.e. 9.9068% of sales

Hence assuming similar percentage for 2017:
SELLING AND GENERAL EXPENSES FOR 2017=4,120,000*9.9068%=$408,158.51

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