# ECONOMICS

## COST ACCOUNTING

### FLEXIBLE BUDGETS

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
IN 2017, ABC Company’s net income was P 200, 000, and in 2018, it was P 50, 000. What percentage increase in net income must ABC achieve in 2019 to offset the 2018 decline in net income?
 A 60% B 300% C 400% D 600%
Explanation:

Detailed explanation-1: -The net profit margin calculation is simple. Take your net income and divide it by sales (or revenue, sometimes called the top line). For example if your sales are \$1 million and your net income is \$100, 000, your net profit margin is 10%.

Detailed explanation-2: -Net profit = Total Revenue-Total Expenses Total expenses represents all expenses-cost of goods sold, operating expenses, income taxes, interest expenses on loans and debt, depreciation of fixed assets, and SG&A (selling, general, and administrative expenses).

Detailed explanation-3: -Net profit is gross profit minus operating expenses and taxes. You can also think of it as total income minus all expenses.

There is 1 question to complete.