1. 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	$2,220,000			100	%
   Cost of goods sold	1,198,800			60
   Gross profit	$1,021,200			40	%
   Selling expenses	$643,800			24	%
   Administrative expenses	244,200			10
   Total operating expenses	$888,000			34	%
   Operating income	$133,200			6	%
   Other revenue	44,400			2
   	$177,600			8	%
   Other expense	22,200			1
   Income before income tax	$155,400			7	%
   Income tax expense	66,600			4
   Net income	$88,800			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	$2,220,000	%	100.0%
   Cost of goods sold	1,198,800	%	60%
   Gross profit	$1,021,200	%	40%
   Selling expenses	$643,800	%	24%
   Administrative expenses	244,200	%	10%
   Total operating expenses	$888,000	%	34%
   Income from operations	$133,200	%	6%
   Other revenue	44,400	%	2%
   	$177,600	%	8%
   Other expense	22,200	%	1%
   Income before income tax	$155,400	%	7%
   Income tax expense	66,600	%	4%
   Net income	$88,800	%	3%

   Feedback

   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.