Using the Income Statement Below, Develop a Common-Size Statement by Filling

question 22

Essay

Using the income statement below, develop a common-size statement by filling in the blanks provided. Show your work. Round to one decimal place.
$\begin{array}{|l|c|l|}\hline & 20 \mathrm{xx} & \mathbf{2 0 x x} \\\hline & & \\\hline \text { Net sales } & \$ 200,000 & \\\hline \text { Cost of goods sold } & 116,000 & \\\hline \text { Gross margin } & \$ 84,000 & \\\hline \text { Operating expenses } & 46,000 & \\\hline \text { Income before income taxes } & \$ 38,000 & \\\hline \text { Income taxes expense } & 15,200 & \\\hline \text { Net income } & \$ 22,800 & \\\hline & & \\\hline\end{array}$

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the standard cost, calculated by subtracting the standard labor cost from the actual labor cost.

February

February is the second month of the year in the Gregorian calendar, known for having 28 days in common years and 29 days in leap years.

May

The fifth month of the year in the Gregorian calendar.

Labor Efficiency Variance

The difference between the actual labor hours used in production and the standard hours expected, multiplied by the standard labor rate.