Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are: Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20
Percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
What is the expected sales revenue for March?
A) $15,000
B) $21,000
C) $19,500
D) $4,500

Question

Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are:  Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20
Percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
What is the expected sales revenue for March?
A) $15,000 
B) $21,000 
C) $19,500 
D) $4,500

Quizplus · Accepted Answer

First, we need to find the estimated sales for March. 
March estimated sales = (February estimated sales * 1.2) = (9,000 * 1.2) = 10,800
Then, we need to add the March estimated sales to the beginning finished goods inventory: 
10,800 + 900 = 11,700
Finally, we can calculate the expected sales revenue for March: 
11,700 * $5 = $58,500 
Therefore, the expected sales revenue for March is $19,500 (option C).

Foremost Corporation Manufactures Boxes