Easter Pty Ltd operates a facility making chocolate Easter eggs. Easter has a policy that all unsold chocolate eggs can be returned for a full refund within 1 week of Easter Sunday. On 1 March 2014, Easter sold 500 pallets of packaged eggs at $100 per pallet. Historical data indicates that 20% of the stock will be returned for a refund. Within one month of Easter Sunday (by the end of April 2014) 10% of the eggs were retuned for refund. Using the expected sales approach, how much revenue would be recognised by Easter at the end of April 2014?

Question

Quizplus · Accepted Answer

Easter sold 500 pallets at $100 each, totaling $50,000. With an expected 20% return rate, $10,000 worth of sales are expected to be refunded. By the end of April, only 10% were returned, so $5,000 is refunded. Therefore, $45,000 is recognized as revenue.

Easter Pty Ltd Operates a Facility Making Chocolate Easter Eggs