Calgary Doughnuts Had Sales of $300 Million in 2007

question 8

Multiple Choice

Calgary Doughnuts had sales of $300 million in 2007. Its cost of sales were $200 million. If sales are expected to grow at 15% in 2008, compute the forecasted costs using the percent of sales method.

• A) $210 million
• B) $215 million
• C) $225 million
• D) $230 million

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Definitions:

Support Departments

Units within an organization that provide essential services or support to the production or primary activities departments.

Indirect Costs

Expenses that are not directly traceable to a specific product, project, or activity, often including utilities, rent, and administrative salaries.

Responsibility Centres

Sections or divisions of a business for which a manager has authority and responsibility, typically including revenue, expense, profit, and investment centers.

Seasonal

Relating to or dependent on a particular season or time of year, often affecting businesses, climate, or activities in a cyclical manner.