Advanced Enterprises reports year-end information from 2018 as follows:

Advanced is developing the 2019 budget.In 2019 the company would like to increase selling prices by 12.5%,and as a result expects a decrease in sales volume of 9%.All other operating expenses are expected to remain constant.Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.
What is budgeted cost of goods sold for 2019?

Question

Advanced Enterprises reports year-end information from 2018 as follows:

Advanced is developing the 2019 budget.In 2019 the company would like to increase selling prices by 12.5%,and as a result expects a decrease in sales volume of 9%.All other operating expenses are expected to remain constant.Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.
What is budgeted cost of goods sold for 2019?

Quizplus · Accepted Answer

Cost of goods sold in 2018 per unit: $643,000/160,750 units = $4 per unit
Number of units sold in 2019 = 160,750 × 0.91 = 146,282.5 units × $4 per unit = $585,130.

Advanced Enterprises Reports Year-End Information from 2018 as Follows