Answer (C) is correct . Cost of goods sold is expected to be 40% of sales. Thus, cost of goods sold is $260,000 ($650,000 February sales ¡Á 40%).Answer (A) is incorrect because The amount of $195,000 is based on 30% of sales.
Answer (B) is incorrect because Cost of goods sold, minus ending inventory, plus beginning inventory equals $254,000.
Answer (D) is incorrect because Purchases, plus ending inventory, minus beginning inventory equals $272,000.
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The amount for cost of goods sold that will appear on Karmee Company’s pro forma income statement for the month of February will be
