Question

Violet Sales Corp, reports the year-end information from 2019 as follows: Sales (35,500 units) $284,000 Cost...

Violet Sales Corp, reports the year-end information from 2019 as follows:

Sales (35,500 units) $284,000
Cost of goods sold 105,000
Gross margin 179,000
Operating expenses 152,000
Operating income $27,000


Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.

What is budgeted sales for 2019? (Round interim calculations to the nearest cent and the final answer to the nearest dollar.)

A. $252,788

B. $284,001

C. $335,092

D. $293,940

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Homework Answers

Answer #1
Selling price per unit
Total Sales 284000
Units 35500
Selling price per unit 8
Increase in selling price per unit (8*3.5%) 0.28
Revised selling price (8+0.28) 8.28
Calculation of number of sale units
Present sale units 35500
decrease in units 4970
Revised number of units (35500 - 4970) 30530
Calculation of budgeted sales
Revised selling price 8.28
Revised number of units 30530
Budgeted Sales (8.28*252788) 252788

Therefore, the right answer is option (A) $ 252788

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