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    Procter & Gamble is a household products company that owns brands like Gillette, Bounty, and Tide. Its 2006 income statement showed net sales of $68.22 billion and operating income of $13.249 billion. If Procter & Gamble's sales increased 10% in 2007 while its variable costs increased proportionally and fixed costs remained the same, its predicted 2007 operating income would be higher than 2006 but increase by less than 10% due to relatively fixed costs.

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    Procter & Gamble is a household products company that owns brands like Gillette, Bounty, and Tide. Its 2006 income statement showed net sales of $68.22 billion and operating income of $13.249 billion. If Procter & Gamble's sales increased 10% in 2007 while its variable costs increased proportionally and fixed costs remained the same, its predicted 2007 operating income would be higher than 2006 but increase by less than 10% due to relatively fixed costs.

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    If You Need The Solution For This or Any Other School / College / University Assignment Then Just Email Me at - I Will Respond ASAP. Thank You

    Uploaded by

    Waqar Ahmad
    Procter & Gamble is a household products company that owns brands like Gillette, Bounty, and Tide. Its 2006 income statement showed net sales of $68.22 billion and operating income of $13.249 billion. If Procter & Gamble's sales increased 10% in 2007 while its variable costs increased proportionally and fixed costs remained the same, its predicted 2007 operating income would be higher than 2006 but increase by less than 10% due to relatively fixed costs.

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    Download as docx, pdf, or txt
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    Procter & Gamble Company is a Cincinnati-based company that produces household products under

    brand names such as Gillette, Bounty, Crest, Folgers, and Tide. The companys 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.

    If you need the solution for this or any other school / college / university assignment then just email me at
    waqar42@gmail.com. I will respond ASAP. Thank You

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