Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 22

Kraft Bakeries introduced in 2010 a new line of frozen apple pie. For 2010, sales by quarter were as follows: 11,000 units; 16,000 units; 15,000 units; and 20,000 units. Because of aggressive marketing and promotion, the company expects that sales for each quarter of 2011 will be 25 percent higher than the respective quarter in 2010. The selling price per unit in 2011 is expected to be $4. What are the expected sales, in units and dollars, for the second quarter of 2011? For the third quarter of 2011?

Step 1 of 3

Sales Revenue:

Sales Revenue is the amount realized on the sale of a particular produced or merchandise sold. It is closed to the income summary account by recording a closing entry. It is reported in the income statement at the end of a particular period. Sales discounts, and sales returns and allowances are reduced from the sales revenue to calculate net sales revenue. Gross profit is calculated by reducing the cost of goods sold from the net sales revenue.