The ratio of costs to revenues can indicate opportunities for activity-based costing to increase efficiency and reduce costs. Refer to Samsung’s financial statements in Appendix A to answer the following.

Required

1. Compute the ratio of costs (titled as cost of sales plus selling and administrative expenses) to revenue for 2017.

2. Compute the ratio of costs (titled as cost of sales plus selling and administrative expenses) to revenue for 2016.

3. Was Samsung’s ratio of costs to revenues higher in 2017 or 2016?