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Yuri [45]
3 years ago
9

Violet Sales Corp, reports the year-end information from 2020 as follows: Sales (35,000 units) $280,000 Cost of goods sold (105,

000) Gross margin $175,000 Operating expenses (155,000) Operating income $20,000 Violet is developing the 2020 budget. In 2020 the company would like to increase selling prices by 5.5%, and as a result expects a decrease in sales volume of 15%. 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 2020
Business
1 answer:
stiv31 [10]3 years ago
3 0

Answer:

COGS= $89,250

Explanation:

Giving the following information:

First, we need to calculate the unitary cost of goods sold:

Unitary COGS= 105,000 / 35,000= $3

<u>Now, the new number of units sold:</u>

Units sold= 35,000*0.85= 29,750

<u>Finally, the COGS for 2020:</u>

COGS= 29,750*3

COGS= $89,250

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