Question

​MacMan, Inc. reported the following​ data: 2019 2018 Amount Percentage Revenues $ 6 comma 380 $ 4 comma 990 $ 1 comma 390 27.86​% Cost of goods sold 3 comma 390 2 comma 200 1 comma 190 54.09​% Gross profit 2 comma 990 2 comma 790 200 7.17​% Operating​ expenses: Sales and marketing expense 730 650 80 12.31​% General and administrative expenses 410 445 ( 35 ) ( 7.87 )​% Research and development expense 490 420 70 16.67​% Other expense 480 720 ​(240​) ​(33.33​)% Total operating expenses 2 comma 110 2 comma 235 ​(125​) ​(5.59​)% Income before income tax 880 555 325 58.56​% Income tax expense 230 250 $( 20 ) ( 8 )​% Net income​ (loss) $ 650 $ 305 $ 345 113.11​% The horizontal analysis shows that cost of goods sold has​ ________. (Round your answer to two decimal​ places.) A. increased by 27.86​% B. decreased by 27.86​% C. decreased by 54.09​% D. increased by 54.09​%

Answer 1

Answer :- The horizontal analysis shows that cost of goods sold has :-

Cost of goods sold in 2018 = $2,200

Cost of goods sold in 2019 = $3,390

Increase in cost of goods sold = $1,190

Percentage increase in cost of goods sold = $1,190/$2,200 *100

Percentage increase in cost of goods sold = 54.09%

So the increase in cost of goods sold by 54.09% therefore the correct answer is option D. ( Increased by 54.09%)

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