How Will a Percentage of Sales Model Treat Cost of Goods

question 76

Multiple Choice

How will a percentage of sales model treat cost of goods sold if sales revenues are expected to grow by 20% to $1 million? Cost of goods sold will:

• A)Grow at a slower rate than sales
• B)Remain proportionate to sales
• C)Be forecast to increase at the rate of inflation
• D)Increase to $800,000

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