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18 votes
Advanced Enterprises reports year−end information from 2019 as​ follows: Sales​ (160,250 units) ​$969,000 Cost of goods sold ​(641,000) Gross margin ​328,000 Operating expenses ​(268,000) Operating income ​$60,000 Advanced is developing the 2020 budget. In 2020 the company would like to increase selling prices by​ 13.5%, and as a result expects a decrease in sales volume of​ 10%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted cost of goods sold

User Shahriar Shojib
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1 Answer

15 votes
15 votes

Answer:

Cost of goods sold = $576,900

Step-by-step explanation:

The budgeted cost of goods sold will be the sales volume in 2020 multiplied by cost per unit .

Sales volume in year 2020= (100-10)% × sales figure for 2019

= 90% × 160,250= 144,225

Cost of goods sold per unit = cost of goods sold in 2019/Sales units in 2019

= 641,000/160250=$4

Cost of goods sold = $4× 144,225 = $576,900

Cost of goods sold = $576,900

User Kaka Ruto
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