Use the following selected information from Wheeler,LLC to determine the 2017 and 2016 common size percentages for cost of goods sold using Net sales as the base.
$\begin{array}{|l|r|r|}
\hline&2017&2016\
\hline \text { Net sales } & \$ 276,200 & \$ 231,400 \
\hline \text { Cost of goods sold } & 151,900 & 129,590 \
\hline \text { Operating expenses } & 55,240 & 53,240 \
\hline \text { Net earnings } & 27,820 & 19,820\
\hline
\end{array}$

A) 36.4% for 2017 and 41.1% for 2016.
B) 55.0% for 2017 and 56.0% for 2016.
C) 119.4% for 2017 and 100.0% for 2016.
D) 117.2% for 2017 and 100.0% for 2016.
E) 65.1% for 2017 and 56.0% for 2016.

Question

Use the following selected information from Wheeler,LLC to determine the 2017 and 2016 common size percentages for cost of goods sold using Net sales as the base.
$\begin{array}{|l|r|r|}
\hline&2017&2016\
\hline \text { Net sales } & \$ 276,200 & \$ 231,400 \
\hline \text { Cost of goods sold } & 151,900 & 129,590 \
\hline \text { Operating expenses } & 55,240 & 53,240 \
\hline \text { Net earnings } & 27,820 & 19,820\
\hline
\end{array}$

A) 36.4% for 2017 and 41.1% for 2016.
B) 55.0% for 2017 and 56.0% for 2016.
C) 119.4% for 2017 and 100.0% for 2016.
D) 117.2% for 2017 and 100.0% for 2016.
E) 65.1% for 2017 and 56.0% for 2016.

Quizplus · Accepted Answer

To calculate the common size percentages for cost of goods sold, divide the cost of goods sold by net sales for each year. For 2017: $151,900 / 276,200 = 0.55$ or 55.0%. For 2016: $129,590 / 231,400 = 0.56$ or 56.0%.

Use the Following Selected Information from Wheeler,LLC to Determine the 2017