Parker Corp. ,which operates on a calendar year,expects to sell 4,000 units in October,and expects sales to increase 20% each month thereafter.Sales price is expected to stay constant at $8 per unit.What are budgeted revenues for the fourth quarter?
A)$32,000
B)$96,000
C)$115,200
D)$116,480

Question

Quizplus · Accepted Answer

The sales for October are 4,000 units. For November, sales are expected to increase by 20%, making it 4,800 units (4,000 * 1.20). For December, sales increase by another 20% from November's sales, making it 5,760 units (4,800 * 1.20). The total units sold in the fourth quarter (October + November + December) are 4,000 + 4,800 + 5,760 = 14,560 units. At a sales price of $8 per unit, the total revenue is 14,560 units * $8/unit = $116,480.