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Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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Procter & Gamble Company is a Cincinnati-based company that

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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 company’s 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.
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Customer: replied 6 years ago.
before I except can you tell me how you knew what to multily the net income of 2006 by?

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