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

Question

Quizplus · Accepted Answer

The base for cost of goods sold in a vertical analysis is typically the net sales figure. This allows for an analysis of the proportion of the cost of goods sold in relation to the overall sales revenue. Using other bases, such as total expenses, selling expenses, or gross profit, would not provide an accurate picture of the cost of goods sold as a percentage of sales.

In Performing a Vertical Analysis, the Base for Cost of Goods