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	$2,420,000			100	%
Cost of goods sold	1,427,800			65
Gross profit	$992,200			35	%
Selling expenses	$605,000			20	%
Administrative expenses	242,000			9
Total operating expenses	$847,000			29	%
Operating income	$145,200			6	%
Other income	48,400			2
	$193,600			8	%
Other expense	24,200			1
Income before income tax	$169,400			7	%
Income tax expense	72,600			4
Net income	$96,800			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
Sales	$2,420,000	fill in the blank 8d7ba5023fd0fb0_1%	100.0%
Cost of goods sold	1,427,800	fill in the blank 8d7ba5023fd0fb0_2%	65%
Gross profit	$992,200	fill in the blank 8d7ba5023fd0fb0_3%	35%
Selling expenses	$605,000	fill in the blank 8d7ba5023fd0fb0_4%	20%
Administrative expenses	242,000	fill in the blank 8d7ba5023fd0fb0_5%	9%
Total operating expenses	$847,000	fill in the blank 8d7ba5023fd0fb0_6%	29%
Operating income	$145,200	fill in the blank 8d7ba5023fd0fb0_7%	6%
Other income	48,400	fill in the blank 8d7ba5023fd0fb0_8%	2%
	$193,600	fill in the blank 8d7ba5023fd0fb0_9%	8%
Other expense	24,200	fill in the blank 8d7ba5023fd0fb0_10%	1%
Income before income tax	$169,400	fill in the blank 8d7ba5023fd0fb0_11%	7%
Income tax expense	72,600	fill in the blank 8d7ba5023fd0fb0_12%	4%
Net income	$96,800	fill in the blank 8d7ba5023fd0fb0_13%	3%

b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.