Utilizing past cost and expense ratios

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Reference no: EM13987911

In a period of rising sales, utilizing past cost and expense ratios (percent-of-sales method) when preparing pro forma financial statements will tend to ________.

A. overstate costs and understate profits

B. understate costs and understate profits

C. understate costs and overstate profits

D. overstate costs and overstate profits

Reference no: EM13987911

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