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Use the following selected information from Whitman Corp
Use the following selected information from Whitman Corp. to determine the Year 1 and Year 2 trend percentages for cost of goods sold using Year 1 as the base.
Year 2 Year 1 Net sales$279,200 $232,000 Cost of goods sold 151,300 130,190 Operating expenses 54,640 52,640 Net earnings 28,620 20,420
Multiple Choice
- 66.0% for Year 2 and 64.6% for Year 1.
- 120.3% forYear 2 and 100.0% for Year 1.
- 116.2% for Year 2 and 100.0% for Year 1.
- 36.1% for Year 2 and 40.4% for Year 1.
- 54.2% for Year 2 and 56.1% for Year 1.
Expert Solution
Computation of Year 1 and Year 2 Trend Percentages for Cost of Goods Sold using Year 1 as the base:
Trend Percentage = Current Year / Base Year*100
So, Here in this question Base Year is Year 1.
Cost of Goods Sold for Year 1 = $130,190
Cost of Goods Sold for Year 2 = $151,300
Cost of Goods Sold Trend Percentage for Year 1 = $130,190/$130,190*100 = 100%
Cost of Goods Sold Trend Percentage for Year 2 = $151,300/$130,190*100 = 116.21%
So, the correct option is 3rd "116.2% for Year 2 and 100.0% for Year 1".
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