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	$2,510,000			100	%
Cost of merchandise sold	1,531,100			66
Gross profit	$978,900			34	%
Selling expenses	$602,400			20	%
Administrative expenses	225,900			8
Total operating expenses	$828,300			28	%
Income from operations	$150,600			6	%
Other revenue and expense:
Other revenue	50,200			2
Other expense	(25,100)			1
Income before income tax expense	$175,700			7	%
Income tax expense	75,300			5
Net income	$100,400			2	%

Question Content Area

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
Sales	$2,510,000	fill in the blank 28132bffa021f82_1%	100.0%
Cost of merchandise sold	1,531,100	fill in the blank 28132bffa021f82_2%	66%
Gross profit	$978,900	fill in the blank 28132bffa021f82_3%	34%
Selling expenses	$602,400	fill in the blank 28132bffa021f82_4%	20%
Administrative expenses	225,900	fill in the blank 28132bffa021f82_5%	8%
Total operating expenses	$828,300	fill in the blank 28132bffa021f82_6%	28%
Income from operations	$150,600	fill in the blank 28132bffa021f82_7%	6%
Other revenue and expense:
Other revenue	50,200	fill in the blank 28132bffa021f82_8%	2%
Other expense	(25,100)	fill in the blank 28132bffa021f82_9%	1%
Income before income tax	$175,700	fill in the blank 28132bffa021f82_10%	7%
Income tax expense	75,300	fill in the blank 28132bffa021f82_11%	5%
Net income	$100,400	fill in the blank 28132bffa021f82_12%	2%

Question Content Area

b. The company is managing the cost of manufacturing product

betterworse

than the industry, and has slightly

higherlower

selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be

betterworse

than the industry average.