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Your company, a medium-sized manufacturer of widgets, has just held the annual end of year "State of the Business" meeting for all employees. The president discussed how well the company has been doing, focusing on presenting the Income Statement for the last year. During the meeting, he used terms like product costs, and period costs, and how each affects the company's profits. He also announced that going forward, instead of manufacturing just one standard type of widgets, there will be a new department added that will make custom versions of the firm's normal product line.
At the end of the meeting, he asks each supervisor to prepare a memo to his or her own employees, describing in layman's terms the following concepts:
Sample Income Statement
+
Sales
-
COGS
=
Gross profit or gross margin
Selling, General, Administrative expenses
Net income
In your own words, please post a response to the Discussion Board and comment on other postings. You will be graded on the quality of your postings.
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