Common-sized income statement Obj. 2 Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages.

Tannenhill Company Electronics Industry Average Sales $ 4,000,000 100.0%

Cost of goods sold (2,120,000) (60.0)

Gross profit $ 1,880,000 40.0%

Selling expenses $ (1,080,000) (24.0)%

Administrative expenses (640,000) (14.0)

Total operating expenses $ (1,720,000) (38.0)%

Operating income $ 160,000 2.0%

Other revenue and expense:

Other revenue 120,000 3.0 Other expense (80,000) (2.0)

Income before income tax expense $ 200,000 3.0%

Income tax expense (80,000) (2.0)

Net income $ 120,000 1.0%

a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Round to the nearest whole percentage.

b. As far as the data permit, comment on significant relationships revealed by the comparisons.

AppendixLO1