Question

Payton Inc. reports in its 2017 annual report 10-K, sales of $8,180 million and cost of goods sold of $3,272 million. For next year, you project that sales will grow by 3% and that cost of goods sold percentage will be 1 percentage point higher. Projected cost of goods sold for 2018 will be:

Answer 1

Projected cost of goods sold for 2018 will be $3,454 million

Step-by-step explanation:

Step 1. Projected cost of goods sold for 2018 will be Projected cost of goods sold

Step 2. Set up the value of the variables.

= $(8,180*1.03 *(3,272/8,180)+1%)

Step 3. Solve.

= (8,425 * (0.40+1%) = 3,454 million