Question

At January 1, 2016, Sheffield Corp. has beginning inventory of 3000 surfboards. Sheffield estimates it will sell 11000 units during the first quarter of 2016 with a 12% increase in sales each quarter. Sheffield’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2016?

Answer 1

Answer:

budget sale revenue  = $2,069,760

Explanation:

given data

beginning inventory = 3000

sell  = 11000 units

sales = 12% increase

ending inventory = 25%

surfboard costs = $100

sold = $150

to find out

How much is budgeted sales revenue for the third quarter of 2016

solution

first we will get here budget sales unit for quarter 3 that is

budget sales unit = ( 11000 × 112% ) 112%

budget sales unit = $13798.4

and

selling price is here $150

so

budget sale revenue for 3rd quarter sale is = budget sales unit × selling price

budget sale revenue  = $13798.4 ×  $150

budget sale revenue  = $2,069,760