Brady Inc.produced and sold 200 000 units for $50 each last year.For the upcoming year,management believes that if they decrease the price of each unit by 5 per cent,volume will increase 5 per cent.What are Brady's expected sales revenues for the upcoming year?
A) $ 9 450 000
B) $10 000 000
C) $10 500 000
D) $ 9 975 000

Question

Quizplus · Accepted Answer

If the price is decreased by 5%, each unit will sell for $47.50. If the volume increases by 5%, the total number of units sold will be 210,000.

Expected sales revenue = 210,000 x $47.50 = $9,975,000.

Therefore, the best choice is D, which is the closest to the calculated expected revenue.

Brady IncProduced and Sold 200 000 Units for $50 Each Last