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Philip Enterprises, distributor of CDs is developing its budgeted cost of goods sold for next year. Philip has developed the following range of sales estimates and associated probabilities for that year:
Sales estimates Probability
P 60,000 0.25
P 85,000 0.40
P100,000 0.35
problem 1: Philip's cost of goods sold averages 80% of sales. What is the expected value of Philip's budgeted cost of goods sold next year?
a. P85,000
b. P84,000
c. P68,000
d. P67,200
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