Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 18

Estimate Sales Revenues

Starlite Company manufactures office products. Last year, it sold 45,000 electric staplers for $10 per unit. The company estimates that this volume represents a 30 percent share of the current electric stapler market. The market is expected to increase by 10 percent next year. Marketing specialists have determined that as a result of new competition, the company’s market share will fall to 25 percent (of this larger market). Due to changes in prices, the new price for the electric staplers will be $11 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates.

Required

Estimate Starlite’s sales revenues from electric staplers for the coming year.

Step 1 of 6

Sales:

Sales is defined as the transaction between the customer and seller, in which commodity is exchanged in return with the money. In simple world sales are selling of goods or service by charging money.