Answer the following questions using the information below:
After conducting a market research study, Ed Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $120. The annual target sales volume for interior doors is 20,000. Ed has target operating income of 20% of sales.
-What are target sales revenues?
A)$1,920,000
B)$4,000,000
C)$2,400,000
D)None of these answers is correct.

Question

Quizplus · Accepted Answer

The target sales revenues can be calculated as follows:
Target Sales Revenues = Target Sales Volume x Target Price
Target Sales Revenues = 20,000 x $120 = $2,400,000
Therefore, the answer is C.

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