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Adriano Company is developing its budgeted cost of goods sold for next year. Adriano has developed the following range of sales estimates and their corresponding probabilities for the year.
Sales Estimates $1,500,000Probability 25%
Sales Estimates $1,800,000Probability 45%
Sales Estimates $2,400,000Probability 30% Problem 1: Adriano Company's cost of goods sold averages 75% of sales. What is the expected cost of goods sold?
Option 1: $1,425,000
Option 2: $1,905,000
Option 3: $1,428,750
Option 4: $1,900,000
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