Answer the Following Questions Using the Information Below:
Kramer Enterprises

Answer the following questions using the information below:
Kramer Enterprises reports year-end information from 2015 as follows:
$\begin{array}{lr}\text { Sales (160,000 units) } & \$ 960,000 \\\text { Cost of goods sold } & 640,000\\\text { Gross margin } & 320,000 \\\text { Operating expenses } & 260,000 \\\text { Operating income }&\$60,000\end{array}$ Kramer is developing the 2016 budget. In 2016 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 2016?

A) $720,000
B) $582,400
C) $691,200
D) $640,000

Correct Answer:

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