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

	Dawg Electronics Company			Electronics Industry Average
Sales	$ 3,750,000			100	%
Cost of goods sold	(2,062,500)			(61.0)
Gross profit	$1,687,500			39.0	%
Selling expenses	$(1,125,000)			(23.0)	%
Administrative expenses	(262,500)			(10.0)
Total operating expenses	$(1,387,500)			(33.0)	%
Operating income	$300,000			6.0	%
Other revenue and expense:
Other revenue	15,000			3.0
Other expense	$(3,750)			(1.0)
Income before income tax	$ 311,250			8.0	%
Income tax expense	(93,750)			(2.5)
Net income	$217,500			5.5	%

a.  Prepare a common-sized income statement comparing the results of operations for Dawg Electronics Company with the industry average. If required, round percentages to one decimal place.

Dawg Electronics Company
Common-Sized Income Statement
	Dawg Electronics Company Amount	Dawg Electronics Company Percent	Electronics Industry Average
Sales	$3,750,000	fill in the blank 62423f03dfcbfd3_1%	100.0%
Cost of goods sold	(2,062,500)	fill in the blank 62423f03dfcbfd3_2%	(61.0)%
Gross profit	$1,687,500	fill in the blank 62423f03dfcbfd3_3%	39.0%
Selling expenses	$(1,125,000)	fill in the blank 62423f03dfcbfd3_4%	(23.0)%
Administrative expenses	(262,500)	fill in the blank 62423f03dfcbfd3_5%	(10.0)%
Total operating expenses	$(1,387,500)	fill in the blank 62423f03dfcbfd3_6%	(33.0)%
Operating income	$300,000	fill in the blank 62423f03dfcbfd3_7%	6.0%
Other revenue and expense:
Other revenue	15,000	fill in the blank 62423f03dfcbfd3_8%	3.0%
Other expense	(3,750)	fill in the blank 62423f03dfcbfd3_9%	(1.0)%
Income before income tax	$311,250	fill in the blank 62423f03dfcbfd3_10%	8.0%
Income tax expense	(93,750)	fill in the blank 62423f03dfcbfd3_11%	(2.5)%
Net income	$217,500	fill in the blank 62423f03dfcbfd3_12%	5.5%

b.  Which of the following statements is true about Dawg Electronics Company?