Use the following selected information from Whitman Corp. to determine the Year 1 and Year 2 common size percentages for cost of goods sold using Net sales as the base. $\begin{array}{lrr}
& \text { Year } 2 & \text { Year } 1 \
\text { Net sales } & \$ 276,200 & \$ 231,400 \
\text { Cost of goods sold } & 151,900 & 129,590 \
\text { Operating expenses } & 55,240 & 53,240 \
\text { Net earnings } & 27,820 & 19,820
\end{array}$
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 56.0% for year 1.

Question

Quizplus · Accepted Answer

The common size percentage for cost of goods sold is calculated by dividing the cost of goods sold by net sales for each year. For Year 2: $ \frac{151,900}{276,200} \approx 55.0\% $. For Year 1: $ \frac{129,590}{231,400} \approx 56.0\% $.

Use the Following Selected Information from Whitman Corp A) 364% for Year 2 and 41