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:

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In a percentage of sales model, cost of goods sold is tied proportionately to sales. Therefore, if sales revenues grow by 20%, cost of goods sold will also increase at the same rate to maintain the same proportion, resulting in a cost of goods sold of $800,000 (20% of $1 million).

How Will a Percentage of Sales Model Treat Cost of Goods