Apollo Shoes: Payroll, Revenue, and Expenses
Essay by powells1965 • May 18, 2015 • Coursework • 967 Words (4 Pages) • 1,796 Views
Apollo Shoes: Payroll, Revenue, and Expenses
Account | 2006 | 2007 | |
Sales | $246,172,918 | $245,213,453 | |
Sales Expense | $4,497,583 | $13,600,221 | |
Warranty Expense | $1,100,281 | $1,158,128 | |
Payroll Expense | $21,508,690 | $20,917,941 | |
Payroll Taxes | $1,550,989 | $1,577,812 | |
Cost of Goods | $141,569,222 | $130,246,645 | |
Freight Expenses | $4,302,951 | $4,236,263 | |
Category | Formula | 2006 | 2007 |
Sales Expense | Sales Expense / Sales | 1.83% | 5.55% |
Warranty Expense | Warranty Expense / Sales | 0.45% | 0.47% |
Payroll Taxes | Payroll Taxes / Payroll Expense | 7.21% | 7.54% |
Cost of Goods | Cost of Goods / Sales | 57.51% | 53.12% |
Freight Expense | Freight Expense / Sales | 1.75% | 31.15% |
Category | Conclusion | ||
Sales Expense | Significantly more in 2007 | ||
Warranty Expense | Comparable in 2007 from 2006 | ||
Payroll Taxes | Comparable to previous years | ||
Cost of Goods | Decrease significantly due to June 2007 Price Increase | ||
Freight Expense | Comparable to previous years |
There are a few fluctuations on the expenses subject to management discretion, but they appear to have adequate explanations. The company chose to stop the Research and Development on the product line, Phoneshoe, for a cost-cutting measure, and because the current product lines were not wearing out fast enough. The company has decided to change the R&D lab into a personal gym to corporate executives.
Also, Advertising expenses should also decrease, as management has decided not to show a Superbowl ad this year. This is partially because of the rising costs of these ads, as the airing of the 2007 Superbowl ad is close to $1,000,000. The estimates for the increase in the ads is roughly 10% from last year.
The last item is the advance that was given to Mr. Lancaster. The board chose to record this $1,000,000 loan as an “other” receivable, instead of an employee advance. This loan was for personal legal expenses incurred by Mr. Lancaster related to his previous employment, and it was decided as a matter of good will, that similar options will be made available to other board members as the situation occurs.
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