The percentage-of-sales method should be used for projecting the cost of goods sold and the expense items in the income statements.

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The percentage-of-sales method is a commonly used technique for projecting expenses and costs of goods sold based on a percentage of expected sales in the coming period. This method assumes that expenses and costs of goods sold are directly related to sales levels, and therefore can be estimated as a percentage of sales. This method is widely used in budgeting and forecasting activities by businesses and organizations of all sizes.

The Percentage-Of-Sales Method Should Be Used for Projecting the Cost