Question

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for cost of goods sold using Net sales as the base. 2017 2016 Net sales $ 604,200 $ 487,400 Cost of goods sold 241,900 137,390 Operating expenses 88,240 85,040 Net earnings 44,620 31,620

Answer 1

Answer: 2016 = 28.18 %

2017 = 40.03 %

Explanation: Cost of goods sold as a percentage of net sales can be calculated as follows :-

`percentage=(cost\:of\:goods\:sold)/(net\:sales)`

so by putting the values into equation for the two years :-

year 2016

`percentage=(137,390)/(487,400)`

= 28.18 %

year 2017

`percentage=(241,900)/(604,200)`

= 40.03 %