Problem:

Assume a company's Income Statement for Year 12 is as follows:

Income Statement Data Year 12
(in 000s)
Net Revenues from Footwear Sales $ 320,000
Cost of Pairs Sold 200,000
Warehouse Expenses 17,000
Marketing Expenses 45,000
Administrative Expenses 8,000
Operating Profit (Loss) 50,000
Interest Income (expenses) (10,000)
Pre-tax Profit (Loss) 40,000
Income Taxes 12,000
Net Profit (Loss) $ 28,000

Required:

Question 1) Based on the above data, which of the following statements is false?

i) Cost of pairs sold are 62.5% of net revenues.

ii) Marketing costs are 14.1% of net revenues.

iii) Administrative expenses are 2.5% of net revenues.

iv) Warehouse expenses are 5.3% of net revenues.

v) Interest expenses are 3.6% of net revenues.

Explain solution in detail.