How will a percentage of sales model treat cost of goods sold if sales revenues are expected to grow by 20% to $1 million? Cost of goods sold will:

Question

Quizplus · Accepted Answer

In a percentage of sales model, costs are directly proportionate to sales. Therefore, if sales revenues are expected to grow by 20%, cost of goods sold will also increase proportionally, remaining at the same percentage of sales as before.

How Will a Percentage of Sales Model Treat Cost of Goods