Question

Dodge Ball Bearings had sales of 15,000 units at $45 per unit last year. The marketing manager projects a 30 percent increase in unit volume sales this year with a 20 percent price decrease (due to a price reduction by a competitor). Returned merchandise will represent 8 percent of total sales.
1. What is your net dollar sales projection for this year?

Answer 1

Answer:

Net dollar sales projection for this year is $645,840.

Explanation:

Last year = 15,000 units

Price = $45

Projected:

Sales = 15000 units x ( 1 + 30%) = 15000 units x ( 1 + 0.30) = 15000 units x 1.30 = 19,500 units

Price = $45 x ( 1 - 20%) = $45 x ( 1 - 0.20) = $45 x 0.80 = $36

Total Sales Projection = 19,500 x $36 = $702,000

Returned Marchandise = $702,000 x 8% = $56,160

Net Sale = Total Sales - Returned Marchandize = $702,000 - $56,160

Net Sale = $645,840