If Rick's sales increased from $40,000 to $80,000 and its cost of goods sold increased from $30,000 to $50,000,then vertical analysis based on sales would show the following for cost of goods sold for the two periods:
A)75% and 62.5%.
B)62.5% and 75%
C)133.33% and 160%
D)160% and 133.33%.

Question

Quizplus · Accepted Answer

Vertical analysis for cost of goods sold (COGS) is calculated as COGS divided by sales for each period. For the first period, $30,000/$40,000 = 75%. For the second period, $50,000/$80,000 = 62.5%.

If Rick's Sales Increased from $40,000 to $80,000 and Its