Bargains,Inc.manufactures and markets toys.Selected income statement data from 2010 and 2009 appear below:
Required:
a.An analyst can sometimes estimate the variable cost as a percentage of sales for a particular cost by dividing the amount of the change in the cost item between two years by the amount of the change in sales for those two years.The analyst can then multiply the variable cost percentage times sales to determine the total variable cost.Subtracting the variable cost yields the fixed cost for that particular item.Follow this procedure to determine the cost structure for costs of goods sold for Bargains,Inc.
b.Bargains,Inc.projects sales to grow at the following percentages in future years: 2011,9 percent; 2012,11 percent; 2013,15 percent.Using this information project sales,cost of goods sold and gross profit for Bargains,Inc.for 2011 to 2013.

Question

Bargains,Inc.manufactures and markets toys.Selected income statement data from 2010 and 2009 appear below:
  Required:
a.An analyst can sometimes estimate the variable cost as a percentage of sales for a particular cost by dividing the amount of the change in the cost item between two years by the amount of the change in sales for those two years.The analyst can then multiply the variable cost percentage times sales to determine the total variable cost.Subtracting the variable cost yields the fixed cost for that particular item.Follow this procedure to determine the cost structure for costs of goods sold for Bargains,Inc.
b.Bargains,Inc.projects sales to grow at the following percentages in future years: 2011,9 percent; 2012,11 percent; 2013,15 percent.Using this information project sales,cost of goods sold and gross profit for Bargains,Inc.for 2011 to 2013.

Quizplus · Accepted Answer

The Answer of Bargains,Inc.manufactures and markets toys.Selected income statement data from 2010 and 2009 appear below:
  Required:
a.An analyst can sometimes estimate the variable cost as a percentage of sales for a particular cost by dividing the amount of the change in the cost item between two years by the amount of the change in sales for those two years.The analyst can then multiply the variable cost percentage times sales to determine the total variable cost.Subtracting the variable cost yields the fixed cost for that particular item.Follow this procedure to determine the cost structure for costs of goods sold for Bargains,Inc.
b.Bargains,Inc.projects sales to grow at the following percentages in future years: 2011,9 percent; 2012,11 percent; 2013,15 percent.Using this information project sales,cost of goods sold and gross profit for Bargains,Inc.for 2011 to 2013.