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	$800,000			100	%
Cost of merchandise sold	536,000			72
Gross profit	$264,000			28	%
Selling expenses	$152,000			15	%
Administrative expenses	64,000			7
Total operating expenses	$216,000			22	%
Income from operations	$48,000			6	%
Other revenue and expense:
Other revenue	16,000			2
Other expense	(8,000)			1
Income before income tax expense	$56,000			7	%
Income tax expense	24,000			4
Net income	$32,000			3	%

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	$800,000	fill in the blank ddba530f6fb9fc0_1%	100.0%
Cost of merchandise sold	536,000	fill in the blank ddba530f6fb9fc0_2%	72%
Gross profit	$264,000	fill in the blank ddba530f6fb9fc0_3%	28%
Selling expenses	$152,000	fill in the blank ddba530f6fb9fc0_4%	15%
Administrative expenses	64,000	fill in the blank ddba530f6fb9fc0_5%	7%
Total operating expenses	$216,000	fill in the blank ddba530f6fb9fc0_6%	22%
Income from operations	$48,000	fill in the blank ddba530f6fb9fc0_7%	6%
Other revenue and expense:
Other revenue	16,000	fill in the blank ddba530f6fb9fc0_8%	2%
Other expense	(8,000)	fill in the blank ddba530f6fb9fc0_9%	1%
Income before income tax	$56,000	fill in the blank ddba530f6fb9fc0_10%	7%
Income tax expense	24,000	fill in the blank ddba530f6fb9fc0_11%	4%
Net income	$32,000	fill in the blank ddba530f6fb9fc0_12%	3%

Question Content Area

b. The company is managing the cost of manufacturing product

better / worse

than the industry, and has slightly

higher/lower

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

better/worse

than the industry average.