If Net Sales at Good Dog Bakery Increased from $36,000

question 91

Multiple Choice

If Net Sales at Good Dog Bakery increased from $36,000 to $63,000 and its cost of goods sold increased from $20,000 to $38,000, the vertical analysis based on net sales would show the following percentages for cost of goods sold: (Round your final answer to the nearest percentage.)

• A)36% and 20%.
• B)20% and 36%.
• C)56% and 60%.
• D)60% and 36%.

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Definitions:

Total Manufacturing Costs

The complete sum of expenses related to producing goods, including labor, materials, and overhead.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.

Overhead Account

An accounting category used to record all indirect costs associated with the production process, such as utilities, rent, and administrative expenses.

Actual Overhead Cost

The actual expenses incurred for overhead in the manufacturing or production process, including costs related to indirect materials, labor, and other indirect expenses.