Common-Sized Income Statement

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	$2,200,000			100	%
Cost of goods sold	1,210,000			61
Gross profit	$990,000			39	%
Selling expenses	$616,000			23	%
Administrative expenses	242,000			10
Total operating expenses	$858,000			33	%
Operating income	$132,000			6	%
Other revenue	44,000			2
	$176,000			8	%
Other expense	22,000			1
Income before income tax	$154,000			7	%
Income tax expense	66,000			5
Net income	$88,000			2	%

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	$2,200,000	fill in the blank a52dce054055fb7_1%	100.0%
Cost of goods sold	1,210,000	fill in the blank a52dce054055fb7_2%	61%
Gross profit	$990,000	fill in the blank a52dce054055fb7_3%	39%
Selling expenses	$616,000	fill in the blank a52dce054055fb7_4%	23%
Administrative expenses	242,000	fill in the blank a52dce054055fb7_5%	10%
Total operating expenses	$858,000	fill in the blank a52dce054055fb7_6%	33%
Income from operations	$132,000	fill in the blank a52dce054055fb7_7%	6%
Other revenue	44,000	fill in the blank a52dce054055fb7_8%	2%
	$176,000	fill in the blank a52dce054055fb7_9%	8%
Other expense	22,000	fill in the blank a52dce054055fb7_10%	1%
Income before income tax	$154,000	fill in the blank a52dce054055fb7_11%	7%
Income tax expense	66,000	fill in the blank a52dce054055fb7_12%	5%
Net income	$88,000	fill in the blank a52dce054055fb7_13%	2%

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b. The company is managing the cost of manufacturing product better than the industry, and has slightly higher selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be better than the industry average.