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

a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Round to the nearest whole percentage.

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

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Electronics Industry Average Tannenhill Company $4,000,000 100 60 40% Sales 2,120,000 Cost of merchandise sold $1,880,000 Gross profit Selling expenses Administrative expenses $1,080,000 24% 640,000 $1,720,000 5 160,000 14 Total operating expenses Income from operations Other revenue and expense: Other revenue 2% 120,000 (80,000) $ 200,000 80,000 $ 120,000 Other expense Income before income tax expense Income tax expense 1% Net income