Operating data for Swifty Corporation are presented below. 2022 2021Sales revenue $830,700 $634,900 Cost of goods sold 529,000 415,000 Selling expenses 124,700 73,600 Administrative expenses 78,800 53,900 Income tax expense 33,500 23,400 Net income 64,700 69,000 Prepare a schedule showing a vertical analysis for 2022 and 2021. (Round percentages to 1 decimal place, e. g. 12.1%.)

Answer and Explanation:

The preparation of the vertical analysis is presented below:

Particulars      Amount           %      Amount    %

Sales                 $830,700100      $634,900100

Less:

Cost of goods sold $529,00063.7    $415,00065.4

Gross Profit          $301,70036.3     $219,90034.5

Less:

Selling Expenses$124,70015.0       $73,60011.6

administrative expenses $78,800 9.5  $53,9008.5

Total Operating

expenses               $203,50024.5$127,500  20.9

Income before

income taxes         $98,200          11.8  $92,400  14.5

Less:

Income tax expenses $33,5004.0    $23,400  3.7

Net Income               $64,7007.8    $69,00010.8

Working note

The percentage is like

= Items value ÷ sales × 100

Like for cost of goods sold

= $529,000 ÷ $830,700 × 100

= 63.68%

It is same applicable for other items also

in terms of experimental research, mcdonald’s charging different prices in the two cities relates to