The sales budget for Modesto Corp.shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12,respectively.The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units.The beginning inventory of Product B is 2,500 units.The desired ending inventory of Product B is 3,000 units.Total budgeted sales of both products for the year would be:

Question

Quizplus · Accepted Answer

First, we need to calculate the desired ending inventory for Product A:

Desired ending inventory for Product A = Beginning inventory for Product A x 1.2
= 2,000 x 1.2
= 2,400

Now, we can calculate the total units of Product A that Modesto Corp. plans to sell:

Total units of Product A = Units to be sold + Desired ending inventory - Beginning inventory
= 20,000 + 2,400 - 2,000
= 20,400

Next, we can calculate the total units of Product B that Modesto Corp. plans to sell:

Total units of Product B = Units to be sold + Desired ending inventory - Beginning inventory
= 22,000 + 3,000 - 2,500
= 22,500

Now, we can calculate the total budgeted sales for the year:

Total budgeted sales = (Total units of Product A x Price of Product A) + (Total units of Product B x Price of Product B)
= (20,400 x $10) + (22,500 x $12)
= $204,000 + $270,000
= $474,000

Therefore, the answer is D) $464,000.

The Sales Budget for Modesto Corp