In performing a vertical analysis the base for cost of goods sold is
A) total selling expenses.
B) net sales.
C) total revenues.
D) total expenses.

Question

Quizplus · Accepted Answer

In performing a vertical analysis, the base for cost of goods sold is typically net sales. This is because cost of goods sold is a direct expense related to the production or purchase of goods that are sold, and so it is most meaningful to compare it to the amount of revenue generated from those sales.

In Performing a Vertical Analysis the Base for Cost of Goods