c. Define the direct materials variance and explain the two components that makeup this variance. Cost of goods sold 483,000 420,000 Gross profit 117,000 80,000 Operating expenses 57,200 44,000 Net income $59,800 $36,000 Prepare a vertical analysis for both years, using the following chart. 2021 Net sales 2020 $600,000 $500,000 2021 Percent 2020 Percent Cost of goods sold 483,000 420,000 Gross profit 117,000 80,000 Operating expenses 57,200 44,000 Net income $59,800 $36,000