A Company Reports the Following Comparative Income Statements What Are the Costs of Goods Sold in Common-Size Percents

question 49

Essay

A company reports the following comparative income statements:
$\begin{array}{|l|r|r|} \hline& 2014 & 2013 \\\hline \text { Net sales } & \$ 736,000 & \$ 840,000 \\\hline \text { Cost of goods sold } & 518,880 & 571,200 \\\hline \text { Gross profit } & \$ 217,120 & \$ 268,800 \\\hline \text { Operating expenses } & 104,800 & 130,000 \\\hline \text { Net income } & \$ 112,320 & \$ 138,800 \\\hline\end{array}$ What are the costs of goods sold in common-size percents for 2013 and 2014, respectively?

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Definitions:

Price Increase

A Price Increase refers to a rise in the cost of goods or services that can occur due to various factors like inflation, increased production costs, or higher demand.

Immediate Market Period

A very short time frame in economics during which the supply of a good is completely fixed and cannot respond to changes in demand.

Supply

The total amount of a product or service that is available to consumers, which can vary based on price, production costs, and other factors.

Elastic

A term used in economics to describe the sensitivity of the demand or supply of a good or service to changes in its price.