Cellular Solutions, Inc., had a very successful year in 2009. Based on a $100 average unit selling price, monthly sales during 2009 were as follows:
Mr. Serene, vice president of sales, is preparing the sales budget for 2010. Increased manufacturing costs will make it necessary to increase the selling price by 10 percent. Even with this price increase, the unit volume of sales is expected to increase by 20 percent. The seasonal sales pattern shown for 2009 is expected to continue in 2010.
a. Prepare the monthly sales unit and dollar budgets for the first quarter of 2010.
b. Mr. Serene is considering the possibility of raising the average selling price by 30 percent in 2010. If this action is taken, he projects that the sales volume for the year will increase by only 12 percent. What would forecasted sales in units and dollars be in 2010 if his projection is correct?

Question

Cellular Solutions, Inc., had a very successful year in 2009. Based on a $100 average unit selling price, monthly sales during 2009 were as follows:
  Mr. Serene, vice president of sales, is preparing the sales budget for 2010. Increased manufacturing costs will make it necessary to increase the selling price by 10 percent. Even with this price increase, the unit volume of sales is expected to increase by 20 percent. The seasonal sales pattern shown for 2009 is expected to continue in 2010. 
a. Prepare the monthly sales unit and dollar budgets for the first quarter of 2010.
b. Mr. Serene is considering the possibility of raising the average selling price by 30 percent in 2010. If this action is taken, he projects that the sales volume for the year will increase by only 12 percent. What would forecasted sales in units and dollars be in 2010 if his projection is correct?

Quizplus · Accepted Answer

The Answer of Cellular Solutions, Inc., had a very successful year in 2009. Based on a $100 average unit selling price, monthly sales during 2009 were as follows:
  Mr. Serene, vice president of sales, is preparing the sales budget for 2010. Increased manufacturing costs will make it necessary to increase the selling price by 10 percent. Even with this price increase, the unit volume of sales is expected to increase by 20 percent. The seasonal sales pattern shown for 2009 is expected to continue in 2010. 
a. Prepare the monthly sales unit and dollar budgets for the first quarter of 2010.
b. Mr. Serene is considering the possibility of raising the average selling price by 30 percent in 2010. If this action is taken, he projects that the sales volume for the year will increase by only 12 percent. What would forecasted sales in units and dollars be in 2010 if his projection is correct?