Answer the following questions using the information below:
After conducting a market research study, Ed Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $240. The annual target sales volume for interior doors is 20,000. Ed has target operating income of 20% of sales.
-What are target sales revenues?
A) $960,000
B) $3,840,000
C) $4,800,000
D) $5,760,000

Question

Quizplus · Accepted Answer

Target sales revenues can be calculated as:

Target sales volume x Target price per unit = Target sales revenues

20,000 x $240 = $4,800,000

Therefore, the target sales revenues are $4,800,000.

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