Answer the following questions using the information below:
Kramer Enterprises reports year-end information from 2010 as follows:
Kramer is developing the 2011 budget. In 2011 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
-What is budgeted sales for 2011?

Question

Answer the following questions using the information below:
Kramer Enterprises reports year-end information from 2010 as follows:
    Kramer is developing the 2011 budget. In 2011 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
-What is budgeted sales for 2011?

Quizplus · Accepted Answer

To find the budgeted sales for 2011, we need to use the following formula:
Budgeted Sales = (Current Year Sales x (1 + Increase in Price %)) x (1 - Decrease in Sales %)
Budgeted Sales = ($960,000 x (1 + 8%)) x (1 - 10%)
Budgeted Sales = ($960,000 x 1.08) x 0.9
Budgeted Sales = $933,120

Therefore, the answer is (C) $933,120.

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