X Company’s cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment,...
X Company’s cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment, and factory rent. The company’s selling, general, and administrative (SG&A) costs include sales office rent, sales staff salaries, and sales commissions. When sales volume increases by 15% in the short term, which of the following is true for the company’s total COGS and total SG&A costs:
Group of answer choices COGS = increase by 15%; SG&A = increase by 15% COGS = increase by 15%; SG&A = no change not enough information COGS = no change; SG&A = increase by 15% COGS = no change; SG&A = no change
Homework Answers
The correct answer is "COGS = increase by 15%; SG&A = no change not enough information"
Reason: COGS is dependent on the volume of sales only. More number of units sold means more items have been consumed and hence COGS will also increase in proprtion to sales volume.
SG&A expenses will not proportionately increase in accordance with the sales volume since it consists of both fixed and variable expenses and hence it is not possible to determine the exact change in SG&A without further information. For example, sales commission would directly increase in proprtion to the sales volume, however, office rent will remain the same.
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X Company’s cost of goods sold (COGS) includes direct materials,
direct labor, depreciation on production equipment,...
X Company’s cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment,...
X Company’s cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment, and factory rent. The company’s selling, general, and administrative (SG&A) costs include sales office rent, sales staff salaries, and sales commissions. When sales volume increases by 15% in the short term, which of the following is true for the company’s total COGS and total SG&A costs: Group of answer choices COGS = increase by 15%; SG&A = increase by 15% COGS = increase by...
13. X Company's cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production...
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need some help. thank you Question 9 2.5 pts X Company's cost of goods sold (COGS)...
need some help. thank you
Question 9 2.5 pts X Company's cost of goods sold (COGS) includes direct materials, direct labor, depreciation on production equipment, and factory rent. The company's selling, general, and administrative (SG&A) costs include sales office rent, sales staff salaries, and sales commissions. When sales volume increases by 15% in the short term, which of the following is true for the company's total COGS and total SG&A costs: not enough information O COGS = increase by 15%;...
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please show work/give explaination
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need some help. thank you
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please show work/give explaination
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