Grafton sells a product for $700. Unit sales for May were 400 and a 3% growth in unit sales is forecasted for each month. Compute the total sales to be reported on the sales budget for month ended June 30.

Question

Quizplus · Accepted Answer

First, we need to calculate the unit sales forecast for June:

Unit sales forecast for June = Unit sales in May x Growth rate
Unit sales forecast for June = 400 x 1.03 = 412

Next, we need to calculate the total sales for June:

Total sales for June = Unit sales forecast for June x Sales price per unit
Total sales for June = 412 x $700 = $288,400

Therefore, the correct answer is D) $288,400.

Grafton Sells a Product for $700