7. the formula for calculating the net income component percentage is a. net income divided by total sales…

7. the formula for calculating the net income component percentage is a. net income divided by total sales equals net income component percentage. b. total sales divided by total expenses equals net income component percentage. c. total sales minus total expenses divided by net income equals total net income percentage. d. none of these.

7. the formula for calculating the net income component percentage is a. net income divided by total sales equals net income component percentage. b. total sales divided by total expenses equals net income component percentage. c. total sales minus total expenses divided by net income equals total net income percentage. d. none of these.

Answer

Explanation:

Step1: Recall net - income component percentage formula

The net - income component percentage is calculated as net income divided by total sales. Let $NI$ be net income and $TS$ be total sales. The formula is $\frac{NI}{TS}\times100%$. Now analyze each option:

  • Option a: net income divided by total sales equals net income component percentage. This is incorrect as it has the wrong denominator in the division.
  • Option b: total sales divided by total expenses has no relation to net - income component percentage.
  • Option c: total sales minus total expenses gives net income, and then dividing by net income is an incorrect operation for calculating net - income component percentage.

Answer:

d. none of these