Question

Cameroon corp. manufactures and sells electric staplers for $15.90 each. if 10,000 units were sold in december, and management forecasts 5% growth in sales each month, the dollar amount of electric stapler sales budgeted for february should be:

Answer 1

Sales in December = 10,000*15.90 = $159,000

For 5% forecast growth each month;

Sales in January = (1+0.05)*Sales in December = 1.05*159,000 = $166,950
Sales in February = (1+0.05)*Sales in January = 1.05*166,950 = $175,297.50

The company should budget for $175,297.50 sales in February.