If Cara's Piano sales increased from $40,000 to $60,000 and its cost of goods sold decreased from $24,000 to $12,000,then vertical analysis based on sales would show the following for cost of goods sold (rounded to the nearest percent):
A)60% and 20%.
B)10% and 30%.
C)50% and 67%.
D)67% and 40%.

Question

Quizplus · Accepted Answer

Vertical analysis calculates each item as a percentage of a base figure. Initially, cost of goods sold was $24,000 out of $40,000 sales, which is 60%. After the change, cost of goods sold is $12,000 out of $60,000 sales, which is 20%.

If Cara's Piano Sales Increased from $40,000 to $60,000 and Its