Question

Violet Sales Corp reports the year-end information from 2019 as follows Salas (35 625 units) 52НЬ рор 110 000 Cost af goods sold 57 000 anses Operating income $22.000 Vialat is devaloping tha 2019 budgat. In 2019 the company would lka to incraasa saling pricAs by 4 5 % , and as a rasut axpacts a dacraasa in salas volume at 14 % Al othar oparating expansas ara axpactad to ramain constant Aasuma that coat ot goods sold is a variable cost and that aparating expanses ara a tbead coat What is budccted salcs for 20192 (Round interim calculations to the nearcst cent and the final anower to the nearcst dollar OA. $256,130 O B. 5339,521 o c. $297.025 O D. $285,001

Answer 1

Answer

A)     $ 256,130

Explanation:

Current Sale units = 35,625 units

Current selling price = 285,000 / 35,625 units = $ 8 per unit

In 2019, the sales units will decrease by 14%. So, the sale units would be 35,625 * 86% = 30,637.50 units

In 2019, the selling price by 4.5%. So, New selling price = 8 * 104.5% = $ 8.36 per unit.

New sales = $ 8.36 * 30,637.50 units

= $ 256,130

In case of any doubt, please comment.