Question

Refer to the information in QS 13-4. Use that information for Tide Corporation to determine the 2016 and 2017 common-size percents for cost of goods sold using net sales as the base.

Short answer

2016:29.6%

2017:49%

Step-by-step solution

Definition of Cost of Goods Sold

An expense account that reports the direct cost incurred by the business entity in the production of the goods sold to the customer is known as the cost of goods sold.

Common size percent for the cost of goods sold

For the year 2016

$\begin{array}{c}\mathbf{C}\mathbf{o}\mathbf{m}\mathbf{m}\mathbf{o}\mathbf{n}\mathbf{s}\mathbf{i}\mathbf{z}\mathbf{e}\mathbf{p}\mathbf{e}\mathbf{r}\mathbf{c}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{=}\frac{\mathbf{C}\mathbf{o}\mathbf{s}\mathbf{t}\mathbf{o}\mathbf{f}\mathbf{g}\mathbf{o}\mathbf{o}\mathbf{d}\mathbf{s}\mathbf{s}\mathbf{o}\mathbf{l}\mathbf{d}\mathbf{o}\mathbf{f}\mathbf{2016}}{\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{s}\mathbf{o}\mathbf{f}\mathbf{2016}}\mathbf{\times }\mathbf{100}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{134}\mathbf{,}\mathbf{088}}{\mathbf{\$}\mathbf{453}\mathbf{,}\mathbf{000}}\mathbf{\times }\mathbf{100}\\ \mathbf{=}\mathbf{29}\mathbf{.}\mathbf{6}\mathbf{\%}\end{array}$

For the year 2017

$\begin{array}{c}\mathbf{C}\mathbf{o}\mathbf{m}\mathbf{m}\mathbf{o}\mathbf{n}\mathbf{s}\mathbf{i}\mathbf{z}\mathbf{e}\mathbf{p}\mathbf{e}\mathbf{r}\mathbf{c}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{=}\frac{\mathbf{C}\mathbf{o}\mathbf{s}\mathbf{t}\mathbf{o}\mathbf{f}\mathbf{g}\mathbf{o}\mathbf{o}\mathbf{d}\mathbf{s}\mathbf{s}\mathbf{o}\mathbf{l}\mathbf{d}\mathbf{o}\mathbf{f}\mathbf{2017}}{\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{s}\mathbf{o}\mathbf{f}\mathbf{2017}}\mathbf{\times }\mathbf{100}\\ \mathbf{=}\frac{\mathbf{\$}\mathbf{392}\mathbf{,}\mathbf{887}}{\mathbf{\$}\mathbf{801}\mathbf{,}\mathbf{810}}\mathbf{\times }\mathbf{100}\\ \mathbf{=}\mathbf{49}\mathbf{\%}\end{array}$