Question

Alpha Omega's percentage of sales model forecasts sales growth of 20 percent next year. If cost of good sold are proportionate at 80 percent of sales, then cost of good sold will increase by _____.

Answer 1

cost of good sold will increase by 20 percent

Step-by-step explanation:

given data

sales growth of 20 percent

cost of good sold = 80 percent of sales

to find out

cost of good sold

solution

As here cost of good sold will increase by 20 percent

because In a percentage of sales model

the expenses that is proportionate will be grow at same rate of the sales

so cost of good sold will increase by 20 percent