Danielle's Design Services
Income Statements
For the Years Ended December 31
| | Year 2 Amount | Year 2 Percent | Year 1 Amount | Year 1 Percent |
|-----------------|---------------|----------------|---------------|----------------|
| Fees earned | $765,340 | 100.0% | $696,520 | 100.0% |
| Operating expenses: | | | | |
| Wages expense | $(254,000) | (33.2)% | $(214,600) | (30.8)% |
| Rent expense | (120,000) | (15.7)% | (108,000) | (15.5)% |
| Supplies expense| (76,500) | (10.0)% | (98,715) | (14.2)% |
| Miscellaneous expense | (11,680) | (1.5)% | (16,420) | (2.4)% |
| Total operating expenses | $(462,180) | (60.4)% | $(437,735) | (62.8)%* |
| Net income | $303,160 | 39.6% | $258,785 | 37.1%* |
*Differences due to rounding
Which of the following analyses reflects the data given?
a. Wages expense, miscellaneous expense, rent expense, and supplies expense all show an unfavorable trend.
b. Wages expense and rent expense show an unfavorable trend, while supplies expense and miscellaneous expense show a favorable trend.
c. Wages expense and rent expense show a favorable trend, while supplies expense and miscellaneous expense show an unfavorable trend.
d. Wages expense and supplies expense show a favorable trend, while rent expense and miscellaneous expense show an unfavorable trend.
