Ratchet Manufacturing's August sales budget calls for sales of 8,000 units.Each month's sales are expected to exceed the prior month's results by 5%.The product selling price is $25 per unit.The expected total sales dollars for September's sales budget are:

Question

Quizplus · Accepted Answer

To calculate the expected total sales dollars for September's sales budget, we need to calculate the expected number of units sold in September and then multiply by the selling price per unit.

Given that each month's sales are expected to exceed the prior month's results by 5%, we can use the following formula to calculate the expected sales for September:

Expected sales for September = (Actual sales in August) x (1 + Growth rate)

Actual sales in August = 8,000 units
Growth rate = 5% = 0.05

Expected sales for September = (8,000) x (1 + 0.05) = 8,400 units

Multiplying the expected number of units sold in September (8,400) by the selling price per unit ($25), we get:

Expected total sales dollars for September = (Expected units sold in September) x (Selling price per unit) = 8,400 x $25 = $210,000

Therefore, the best choice is C.

Ratchet Manufacturing's August Sales Budget Calls for Sales of 8,000