If Rick's sales increased from $49,000 to $81,000 and its cost of goods sold increased from $25,000 to $66,000, then vertical analysis based on sales would show the following for cost of goods sold for the two periods:
A) 81.48% and 51.02%.
B) 51.02% and 81.48%.
C) 122.73% and 196.00%.
D) 196.00% and 122.73%.

Question

Quizplus · Accepted Answer

Vertical analysis for cost of goods sold is calculated as (Cost of Goods Sold / Sales) * 100. For the first period, it's ($25,000 / $49,000) * 100 = 51.02%. For the second period, it's ($66,000 / $81,000) * 100 = 81.48%.

If Rick's Sales Increased from $49,000 to $81,000 and Its