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. Tannenhill Company Electronics Industry Average Sales $4,000,000 100.0 % Cost of goods sold (2,120,000) (60.0) Gross profit $1,880,000 40.0 % Selling expenses $(1,080,000) (24.0) % Administrative expenses (640,000) (14.0) Total operating expenses $(1,720,000) (38.0) % Operating income $160,000 2.0 % Other revenue and expense: Other revenue 120,000 3.0 Other expense (80,000) (2.0) Income before income tax expense $200,000 3.0 % Income tax expense (80,000) (2.0) Net income $120,000 1.0 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Tannenhill Company Common-Sized Income Statement For the Year Ended December 31 Tannenhill Company Amount Tannenhill Company Percent Electronics Industry Average Sales $4,000,000 fill in the blank 4ea05f06cfa8f88_1% 100% Cost of goods sold (2,120,000) fill in the blank 4ea05f06cfa8f88_2 (60) Gross profit $1,880,000 fill in the blank 4ea05f06cfa8f88_3% 40% Selling expenses $(1,080,000) fill in the blank 4ea05f06cfa8f88_4% (24)% Administrative expenses (640,000) fill in the blank 4ea05f06cfa8f88_5 (14) Total operating expenses $(1,720,000) fill in the blank 4ea05f06cfa8f88_6% (38)% Operating income $160,000 fill in the blank 4ea05f06cfa8f88_7% 2% Other revenue and expense: Other revenue 120,000 fill in the blank 4ea05f06cfa8f88_8 3 Other expense (80,000) fill in the blank 4ea05f06cfa8f88_9 (2) Income before income tax expense $200,000 fill in the blank 4ea05f06cfa8f88_10% 3% Income tax expense (80,000) fill in the blank 4ea05f06cfa8f88_11 (2) Net income $120,000 fill in the blank 4ea05f06cfa8f88_12 1 b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.

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. Tannenhill Company Electronics Industry Average Sales $4,000,000 100.0 % Cost of goods sold (2,120,000) (60.0) Gross profit $1,880,000 40.0 % Selling expenses $(1,080,000) (24.0) % Administrative expenses (640,000) (14.0) Total operating expenses $(1,720,000) (38.0) % Operating income $160,000 2.0 % Other revenue and expense: Other revenue 120,000 3.0 Other expense (80,000) (2.0) Income before income tax expense $200,000 3.0 % Income tax expense (80,000) (2.0) Net income $120,000 1.0 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. Tannenhill Company Common-Sized Income Statement For the Year Ended December 31 Tannenhill Company Amount Tannenhill Company Percent Electronics Industry Average Sales $4,000,000 fill in the blank 4ea05f06cfa8f88_1% 100% Cost of goods sold (2,120,000) fill in the blank 4ea05f06cfa8f88_2 (60) Gross profit $1,880,000 fill in the blank 4ea05f06cfa8f88_3% 40% Selling expenses $(1,080,000) fill in the blank 4ea05f06cfa8f88_4% (24)% Administrative expenses (640,000) fill in the blank 4ea05f06cfa8f88_5 (14) Total operating expenses $(1,720,000) fill in the blank 4ea05f06cfa8f88_6% (38)% Operating income $160,000 fill in the blank 4ea05f06cfa8f88_7% 2% Other revenue and expense: Other revenue 120,000 fill in the blank 4ea05f06cfa8f88_8 3 Other expense (80,000) fill in the blank 4ea05f06cfa8f88_9 (2) Income before income tax expense $200,000 fill in the blank 4ea05f06cfa8f88_10% 3% Income tax expense (80,000) fill in the blank 4ea05f06cfa8f88_11 (2) Net income $120,000 fill in the blank 4ea05f06cfa8f88_12 1 b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 3E

See similar textbooks

Related questions

Question

Common-Sized Income Statement

	Tannenhill Company	Electronics Industry Average
Sales	$4,000,000		100.0	%
Cost of goods sold	(2,120,000)		(60.0)
Gross profit	$1,880,000		40.0	%
Selling expenses	$(1,080,000)		(24.0)	%
Administrative expenses	(640,000)		(14.0)
Total operating expenses	$(1,720,000)		(38.0)	%
Operating income	$160,000		2.0	%
Other revenue and expense:
Other revenue	120,000		3.0
Other expense	(80,000)		(2.0)
Income before income tax expense	$200,000		3.0	%
Income tax expense	(80,000)		(2.0)
Net income	$120,000		1.0	%

a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average.

Tannenhill Company
Common-Sized Income Statement
For the Year Ended December 31
	Tannenhill Company Amount	Tannenhill Company Percent	Electronics Industry Average
Sales	$4,000,000	fill in the blank 4ea05f06cfa8f88_1%	100%
Cost of goods sold	(2,120,000)	fill in the blank 4ea05f06cfa8f88_2	(60)
Gross profit	$1,880,000	fill in the blank 4ea05f06cfa8f88_3%	40%
Selling expenses	$(1,080,000)	fill in the blank 4ea05f06cfa8f88_4%	(24)%
Administrative expenses	(640,000)	fill in the blank 4ea05f06cfa8f88_5	(14)
Total operating expenses	$(1,720,000)	fill in the blank 4ea05f06cfa8f88_6%	(38)%
Operating income	$160,000	fill in the blank 4ea05f06cfa8f88_7%	2%
Other revenue and expense:
Other revenue	120,000	fill in the blank 4ea05f06cfa8f88_8	3
Other expense	(80,000)	fill in the blank 4ea05f06cfa8f88_9	(2)
Income before income tax expense	$200,000	fill in the blank 4ea05f06cfa8f88_10%	3%
Income tax expense	(80,000)	fill in the blank 4ea05f06cfa8f88_11	(2)
Net income	$120,000	fill in the blank 4ea05f06cfa8f88_12	1

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

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.