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

Smith Electronics Electronics Industry

Company Average

Sales $3,150,000 103.0%

Sales returns and allowances 86,000 3.0%

Net sales $3,064,000 100.0%

Cost of goods sold 1,875,000 60.0%

Gross profit $1,189,000 40.0%

Selling expenses $700,000 23.0%

Administrative expenses 328,000 10.0%

Total operating expenses $1,028,000 33.0%

Operating income $161,000 7.0%

Other income 35,000 1.0%

$196,000 8.0%

Other expense 35,800 1.0%

Income before income tax $160,200 7.0%

Income tax expense 135,000 5.0%

Net income $25,200 2.0%

a. Prepare a common sized income statement comparing the results of operations for Smith Electronics Company with the industry average. Round to one decimal place

b. As far as the data permit, comment on significant relationship revealed by the comparisons.