Robust Resources expects to sell 440 units of Product A and 400 units of Product B each day at an average price of $18 for Product A and $27 for Product B.The expected cost for Product A is 40% of its selling price and the expected cost for Product B is 64% of its selling price.Robust Resources has no beginning inventory,but it wants to have a three-day supply of ending inventory for each product.Compute the company's budgeted sales for the next (seven-day)week.(Round the answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

To calculate the budgeted sales for the next week, we need to calculate the total sales revenue for each product and then add them together.

For Product A:
Expected daily sales = 440 units
Expected selling price = $18
Expected cost = 40% of selling price = 0.4 x $18 = $7.20
Expected gross profit per unit = Selling price - cost = $18 - $7.20 = $10.80
Total expected daily sales revenue = Expected daily sales x Selling price = 440 x $18 = $7,920
Total expected weekly sales revenue = Total expected daily sales revenue x 7 days = $7,920 x 7 = $55,440

For Product B:
Expected daily sales = 400 units
Expected selling price = $27
Expected cost = 64% of selling price = 0.64 x $27 = $17.28
Expected gross profit per unit = Selling price - cost = $27 - $17.28 = $9.72
Total expected daily sales revenue = Expected daily sales x Selling price = 400 x $27 = $10,800
Total expected weekly sales revenue = Total expected daily sales revenue x 7 days = $10,800 x 7 = $75,600

Therefore, the total budgeted sales for the next week is the sum of the sales revenue for each product:
Total budgeted sales = Total expected weekly sales revenue for Product A + Total expected weekly sales revenue for Product B
Total budgeted sales = $55,440 + $75,600 = $131,040

Hence, the best choice is C.

Robust Resources Expects to Sell 440 Units of Product a and 400