Question

For the period from 2019 to​ 2020, a company reports the​ following: Percentage change in sales 30​% increase Percentage change in cost of goods sold 20​% increase Percentage change in gross profit 25​% increase If sales are $5,000,000 in​ 2019, what are sales in​ 2020?

Answer 1

If sales are $5,000,000 in​ 2019, the sales in 2020 will be

$6,500,000

Step-by-step explanation:

a) Data and Calculations:

2019 2020 Change

Percentage change in sales 100% 130% 30​% increase

Percentage change in cost of

goods sold 100% 120% 20​% increase

Percentage change in

gross profit 100% 125% 25​% increase

Sales are in​ 2019 = $5,000,000 $6,500,000 ($5 million * 130/100)

Alternatively, the 30% increase can be computed, to get $1,500,000 ($5,000,000 * 30%). This change in sales is then added to the 2019 sales figure to get $6,500,000, which is the sales in 2020.