Cost volume profit of procter and gamble company

Assignment Help Managerial Accounting

Reference no: EM1347405

Procter & Gamble Company is a Cincinnati-based company that produces household products under brand names such as Gillette, Bounty, Crest, Folgers, and Tide. The company's 2006 income statement showed the following (in millions):

Net Sales: $68,222
Costs of Products Sold: $33,125
Selling, General, and Administrative Expense: 21,848
Operating Income: 13,249

Suppose that the cost of products sold is the only variable cost; selling, general, and administrative expenses are fixed with respect to sales. Assume that Procter & Gamble had a 10% increase in sales in 2007 and that there was no change in costs except for increases associated with the higher volume of sales.

Compute the predicted 2007 operating income for Procter & Gamble and its percentage increase. Explain why the percentage increase in income differs from the percentage increase in sales.

Reference no: EM1347405

Questions Cloud

What right have we to burden our children and grandchildren : what right have we to burden our children and grandchildren with these debts while we live high on the hog. Discuss this

Minimum wage legislation : What are your opinion about minimum wage legislation and what kind of a price-control policy is this and who gain?

What is the energy necessary to remove the electron : A circular hole in an aluminum plate is 3.263 cm in diameter at 0.000°C. What is its diameter (in cm) as the temperature of the plate is raised to 129.8°C? Give the answer to four significant figures. The linear expansion coefficient of aluminum i..

Technical means to guarantee data confidentiality : Assess illustrate why technical means to guarantee data confidentiality depend upon trust.

Cost volume profit of procter and gamble company : Procter & Gamble Company is a Cincinnati-based company that produces household products under brand names such as Gillette, Bounty, Crest, Folgers, and Tide. The company's 2006 income statement showed the following (in millions):

Explain what has been happenning in this market : explain how lower coffee bean output in brazil, vietnam, columbia and central america are affecting this market. explain what has been happenning in this market.

Basics of cost-volume-profit : Feather Friends, Inc., distributes the high-quality wooden birdhouse which sells for $20 for each unit. Variable costs are $8 per unit, and fixed costs total $180,000 per year.

What is the utmost value of the electric field : A 100 kg cannon at rest contains a 10-kg cannon ball. When fired, cannon ball leaved the cannon with a speed of 450 m/s. What is the recoil speed of the cannon.

College special policies : Childrens in college are sometimes sold college special policies created for seniors. So, determine is it wise for college Childrens to buy life insurance while they are still in college?

User Account

All Pages