Dunweiler Inc.,is developing a pro forma income statement for the coming year.The chief financial officer estimates that sales will be $150,000,000.If gross profits are historically 36% of sales,what is the expected cost of goods sold (in dollars)?
A)$36,000,000
B)$54,000,000
C)$64,000,000
D)$96,000,000

Question

Quizplus · Accepted Answer

The expected cost of goods sold can be calculated by subtracting the gross profit from the total sales. If gross profits are 36% of sales, then the cost of goods sold would be 100% - 36% = 64% of sales. Therefore, the expected cost of goods sold is 64% of $150,000,000, which is $96,000,000.