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

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.)

Question

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

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.)

Quizplus · Accepted Answer

Budgeted sales in 2019: Selling prices in 2018 were $8 per unit ($284,000/35,500 units);
increase selling price by 3.5% in 2019 means new selling price per unit in 2019 is $8.28 per unit; 2019 sales volume will be 35,500 units × 0.86 = 30,530 units times $8.28 per unit = $252,788

Violet Sales Corp, Reports the Year-End Information from 2019 as Follows