How Will a Percentage of Sales Model Treat Cost of Goods

question 85

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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