Use the following selected information from Farris, LLC to determine the Year 2 and Year 1 trend percents for cost of goods sold using Year 1 as the base.
A) 36.4% for Year 2 and 41.1% for Year 1.
B) 55.0% for Year 2 and 56.0% for Year 1.
C) 119.4% for Year 2 and 100.0% for Year 1.
D) 117.2% for Year 2 and 100.0% for Year 1.
E) 65.1% for Year 2 and 64.6% for Year 1.

Question

Use the following selected information from Farris, LLC to determine the Year 2 and Year 1 trend percents for cost of goods sold using Year 1 as the base. 
A) 36.4% for Year 2 and 41.1% for Year 1. 
B) 55.0% for Year 2 and 56.0% for Year 1. 
C) 119.4% for Year 2 and 100.0% for Year 1. 
D) 117.2% for Year 2 and 100.0% for Year 1. 
E) 65.1% for Year 2 and 64.6% for Year 1.

Quizplus · Accepted Answer

To calculate the trend percent, we divide the current year amount by the base year amount and then multiply by 100.

For Year 2: 
Cost of Goods Sold = $620,000 
Base year (Year 1) COGS = $530,000 
Trend % = ($620,000 / $530,000) x 100 = 117.2%

For Year 1 (using itself as the base): 
Cost of Goods Sold = $530,000 
Base year (Year 1) COGS = $530,000 
Trend % = ($530,000 / $530,000) x 100 = 100%

Therefore, the best choice is D, with a trend percent of 117.2% for Year 2 and 100% for Year 1.

Use the Following Selected Information from Farris, LLC to Determine