If Sydney Tea's net sales decreased from $90,000in year 1 to $49,000 in year 2 and its cost of goods sold decreased from $33,000 in year 1 to $19,000 in year 2, the vertical analysis based on sales would show the following for cost of goods sold for the two periods: (Round your final answer to the nearest percentage.)
A)37% and 39%.
B)39% and 37%.
C)273% and 258%.
D)258% and 273%.

Question

Quizplus · Accepted Answer

The cost of goods sold as a percentage of net sales for year 1 is ($33,000 / $90,000) * 100 = 36.67%, rounded to 37%. For year 2, it is ($19,000 / $49,000) * 100 = 38.78%, rounded to 39%.

If Sydney Tea's Net Sales Decreased from $90,000in Year 1