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

1		Tannenhill Company	Electronics Industry Average
2	Sales	$5,400,000.00	100.0%
3	Cost of goods sold	2,835,000.00	59.5
4	Gross profit	$2,565,000.00	40.5%
5	Selling expenses	$1,404,000.00	23.0%
6	Administrative expenses	810,000.00	13.0
7	Total operating expenses	$2,214,000.00	36.0%
8	Income from operations	$351,000.00	4.5%
9	Other income	315,000.00	2.0
10		$666,000.00	6.5%
11	Other expense	68,000.00	1.3
12	Income before income tax	$598,000.00	5.2%
13	Income tax expense	74,000.00	1.4
14	Net income	$524,000.00	3.8%

	Required:
A.	Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers. Round percentages to one decimal place.
B.	As far as the data permit, comment on significant relationships revealed by the comparisons.

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

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

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.

Tannenhill Company

Common-Sized Income Statement

For the Year Ended December 31, 20--

1		Tannenhill Company	Tannenhill Company	Electronics Industry Average
2		Amount	Percent
3	Sales	$5,400,000.00		100.0%
4	Cost of goods sold	2,835,000.00		59.5%
5	Gross profit	$2,565,000.00		40.5%
6	Selling expenses	$1,404,000.00		23.0%
7	Administrative expenses	810,000.00		13.0%
8	Total operating expenses	$2,214,000.00		36.0%
9	Income from operations	$351,000.00		4.5%
10	Other income	315,000.00		2.0%
11		$666,000.00		6.5%
12	Other expense	68,000.00		1.3%
13	Income before income tax	$598,000.00		5.2%
14	Income tax expense	74,000.00		1.4%
15	Net income	$524,000.00		3.8%