An October sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit.The desired ending iventory in units is 15% higher than the beginning inventory of 1,000 units.Total October sales are anticipated to be
A) $69,000
B) $80,500
C) $70,000
D) $92,000

Question

Quizplus · Accepted Answer

First, we need to calculate the desired ending inventory:
15% of 1,000 units = 0.15 x 1,000 = 150 units
Desired ending inventory = 1,000 + 150 = 1,150 units

Next, we can calculate the total sales needed:
Total sales = forecasted sales + desired ending inventory - beginning inventory
Total sales = 7,000 + 1,150 - 1,000
Total sales = 7,150 units

Finally, we can calculate the total revenue:
Total revenue = total sales x price per unit
Total revenue = 7,150 x $11.50
Total revenue = $82,225

Therefore, the closest answer is B) $80,500.

An October Sales Forecast Projects 7,000 Units Are Going to Be