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. Year 2 Year 1 Net sales $505,800 $410,600 Cost of goods sold 214,900 135,050 Operating expenses 78,340 75,500 Net earnings 39,580 28,080

See the explanation section.

Explanation:

                                                     Whitman Corp.

                                    Comparative Income Statements

Particulars                           Year 1               %              Year 2               %

Sales                                  $410,600             100          $505,800          100

Cost of goods sold            (135,050)           (32.89)     (214,900)           (42.49)

Gross profit                        181,900               44.30       406,200           80.31

Operating expenses         (75,500)              (18.39)      (78,340)            (15.49)

Net income                        $28,080              6.84       $39,580             7.83