Use the Following Selected Information from Wheeler, LLC to Determine

question 216

Multiple Choice

Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for operating expenses using Net sales as the base. $$\begin{array} { | l | r | r |} \hline & { 2017 } &{ \mathbf { 2 0 1 6 } } \\\hline \text { Net sales } & \$ 276,200 & \$ 231,400 \\\hline \text { Cost of goods sold } & 151,900 & 129,590 \\\hline \text { Operating expenses } & 55,240 & 53,240 \\\hline \text { Net earnings } & 27,82 \mathrm {~d} & 19,820 \\\hline\end{array}$$

• A) 36.4% for 2017 and 41.1% for 2016.
• B) 55.0% for 2017 and 56.0% for 2016.
• C) 23.9% for 2017 and 23.0% for 2016.
• D) 103.8% for 2017 and 100.0% for 2016.
• E) 20.0% for 2017 and 23.0% for 2016.

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Definitions:

Freight Costs

Expenses associated with transporting goods from one place to another, which can be paid by the shipper or the receiver.

Net 45

A payment term indicating that the full payment is due 45 days from the invoice date.

Credit Terms

The conditions under which a seller extends credit to a buyer, detailing the repayment time frame, interest rate, and penalties for late payment.

Cost of Goods Sold

The direct expenses related to the manufacture of the goods a company sells, encompassing both costs of materials and labor.