In a period of rising sales, utilizing past costs and expense ratios (percent-of-sales method) when preparing pro forma financial statements will trend to _______
overstate costs and overstate profits, overstate costs and understate profits, understate costs and overstate profits, or understate costs and understate profits.
Please advise answer & why.© BrainMass Inc. brainmass.com November 24, 2022, 12:00 pm ad1c9bdddf
Overstate cost and understate profits. Since sales are increasing, the variable cost will ...
The solution answers a question regarding utilizing pas cost and expense ratios.