Common-Sized Income Statement

Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhills data are expressed in dollars. The electronics industry averages are expressed in percentages.

	Tannenhill Company			Electronics Industry Average
Sales	$850,000			100	%
Cost of goods sold	450,500			56
Gross profit	$399,500			44	%
Selling expenses	$255,000			27	%
Administrative expenses	93,500			11
Total operating expenses	$348,500			38	%
Operating income	$51,000			6	%
Other income	17,000			2
	$68,000			8	%
Other expense	8,500			1
Income before income tax	$59,500			7	%
Income tax expense	25,500			4
Net income	$34,000			3	%

a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

Tannenhill Company Common-Sized Income Statement For the Year Ended December 31 Tannenhill Company Amount Tannenhill Company Percent Electronics Industry Average 100.0% 450,500 Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other income 5399,500 11% 93,500 $348,500 17,000 $68,000 1% Other expense Income before income tax Income tax expense Net income $59,500 25,500 b. The company is managing the cost of manufacturing product net income as a percent of sales to be than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes than the industry average