Tumbi Umbi Company expects to manufacture and sell 30 000 baskets in 2018 for $6 each.There are 3000 baskets in beginning finished goods inventory with target ending inventory of 4000 baskets.The company keeps no work-in-process inventory.What amount of sales revenue will be reported on the 2018 budgeted income statement?

Question

Quizplus · Accepted Answer

The calculation of sales revenue can be done as follows:

Beginning finished goods inventory = 3000 baskets
Target ending finished goods inventory = 4000 baskets

So, total baskets needed to be produced = 30,000 + 4000 - 3000 = 31,000 baskets

The selling price of each basket is given as $6.

Therefore, the total sales revenue will be = 31,000 x $6 = $186,000

However, since the question asks for the amount of sales revenue that will be reported on the 2018 budgeted income statement, we need to consider only the sales revenue for the current year (2018).

So, the sales revenue for the current year (2018) will be = 30,000 x $6 = $180,000.

Hence, the correct answer is B) $180,000.

Tumbi Umbi Company Expects to Manufacture and Sell 30 000