Essay About Sales Expense And Warranty Expense

Apollo Shoes: Payroll, Revenue, and Expenses
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Apollo Shoes: Payroll, Revenue, and ExpensesAccount20062007Sales       $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 CategoryFormula20062007Sales Expense Sales Expense / Sales1.83%5.55%Warranty ExpenseWarranty Expense / Sales0.45%0.47%Payroll TaxesPayroll Taxes / Payroll Expense7.21%7.54%Cost of GoodsCost of Goods / Sales57.51%53.12%Freight ExpenseFreight Expense /  Sales1.75%31.15%CategoryConclusionSales ExpenseSignificantly more in 2007Warranty ExpenseComparable in 2007 from 2006Payroll TaxesComparable to previous yearsCost of GoodsDecrease significantly due to June 2007 Price IncreaseFreight ExpenseComparable to previous yearsThere 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.