Ramos Company included the following information in its annual report:
$\begin{array}{|l|l|l|l|}
\hline & 2011 & 2010 & 2009 \
\hline \text { Sales } & \$ 178,400 & \$ 162,500 & \$ 155,500 \
\hline\text { Cost of goods sold } & 115,000 & 102,500 & 100,000 \
\hline\text { Operating expenses } & 50,000 & 50,000 & 45,000 \
\hline\text { Net incoume } & 13,400 & 10,000 & 10,500 \
\hline
\end{array}$
- Refer to the information for Ramos Company. In a common size income statement for 2009, the cost of goods sold are expressed as:
A) 64.3%
B) 40.0%
C) 87 %
D) 103%

Question

Ramos Company included the following information in its annual report:
$\begin{array}{|l|l|l|l|}
\hline & 2011 & 2010 & 2009 \
\hline \text { Sales } & \$ 178,400 & \$ 162,500 & \$ 155,500 \
\hline\text { Cost of goods sold }  & 115,000 & 102,500 & 100,000 \
\hline\text { Operating expenses } & 50,000 & 50,000 & 45,000 \
\hline\text { Net incoume }  & 13,400 & 10,000 & 10,500 \
\hline 
\end{array}$
-  Refer to the information for Ramos Company. In a common size income statement for 2009, the cost of goods sold are expressed as:
A) 64.3%
B) 40.0%
C) 87 %
D) 103%

Quizplus · Accepted Answer

To calculate the percentage of cost of goods sold in a common size income statement, divide the cost of goods sold by the total sales for the same year and multiply by 100. For 2009, this is $\frac{100,000}{155,500} \times 100 = 64.3\%$.

Ramos Company Included the Following Information in Its Annual Report