Advanced Enterprises reports year-end information from 2018 as follows:

Advanced is developing the 2019 budget. In 2019 the company would like to increase selling prices by 13.5%, and as a result expects a decrease in sales volume of 9%. 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?
A) $1,090,735
B) $961,000
C) $992,569
D) $874,510

Question

Advanced Enterprises reports year-end information from 2018 as follows:

Advanced is developing the 2019 budget. In 2019 the company would like to increase selling prices by 13.5%, and as a result expects a decrease in sales volume of 9%. 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?
A) $1,090,735 
B) $961,000 
C) $992,569 
D) $874,510

Quizplus · Accepted Answer

Budgeted sales = $961,000 × 1.135 × 0.91 = $992,569

Advanced Enterprises Reports Year-End Information from 2018 as Follows