Reference no: EM132972534

Below are the income statements of Mabuhay and Paperless Publications for the current year:

                                         Mabuhay                   Paperless

Net sales revenue Php 243,500 100.00%          Php 250,000 100.00%

COGS                     200,000 82.14%              197,500   79.00%

Gross Profit                 43,500    17.86%           52,500       21.00%

Selling/Gen Expenses      15,000    6.16%              25,000       10.00%

Income from operations    28,500     11.70%          27,500       11.00%

Income tax expense          8,550         3.51%          8,250       3.30%

Net Income Php              19,950          8.19%                  Php 19,250 7.70%

Problem 1: Which firm has the better relationship between net income and net sales revenue?

Select one:

a. Cannot be determined

b. Mabuhay

c. Both have the same relationship

d. Paperless