Preparing a percentage-of-sales analysis. Economy Auto Parts, Inc., operates two retail auto parts stores. A monthly income statement is prepared for each store. This statement reflects both the direct operating expenses of the stores and the allocated indirect expenses. The combined statements for October 19X8 are shown below.

Instructions 1. For each store, prepare an analysis expressing each item on the income statement as a percent of net sales. Round the percents to one decimal place.
2. Compare the percentages for the two stores. Note the differences.
3. What types of questions would management ask about each of the differences —
listed in Instruction 2?

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Net Sales Cost of Goods Sold Gross Profit on Sales Direct Expenses: Store 1 Store 2 $40,000 $65,000 25.000 41,200 $15,000 $23,800 Salaries and Commissions $ 4.000 $ 4,800 Payroll Benefits 600 725 Delivery Fees 1,000 800 Advertising 300 290 Credit Card Fees 280 310 Supplies 350 450 Rent 1.800 2,100