=+Company Average Sales $2,050,000 102.5%

Sales returns and allowances 50,000 2.5 __________ _____ Net sales $2,000,000 100.0%

Cost of goods sold 1,100,000 61.0 __________ _____ Gross profit $ 900,000 39.0% __________ _____ Selling expenses $ 560,000 23.0%

Administrative expenses 220,000 10.0 __________ _____ Total operating expenses $ 780,000 33.0% __________ _____ Operating income $ 120,000 6.0%

Other income 44,000 2.2 __________ _____

$ 164,000 8.2%

Other expense 20,000 1.0 __________ _____ Income before income tax $ 144,000 7.2%

Income tax 60,000 5.0 __________ _____ Net income $ 84,000 2.2% __________ _____ __________ _____