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9 October, 23:40

Advanced Enterprises reports yearminusend information from 2018 as follows: Sales (160 comma 250 units) $ 963 comma 000 Cost of goods sold 641 comma 000 Gross margin 322 comma 000 Operating expenses 269 comma 000 Operating income $ 53 comma 000 Advanced is developing the 2019 budget. In 2019 the company would like to increase selling prices by 13.5 %, and as a result expects a decrease in sales volume of 9 %. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 2019?

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  1. 10 October, 00:06
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    Sales budget in 2019 $994,543.55

    Explanation:

    The sales budgeted shows the expected units to be sold at a particular price for forth coming accounting period, together with the total sales revenue.

    Selling price in 2018 = 963,000/160,250 = $6.009

    Expected selling price in 2019 = 113.5% * price in 2018

    = 113.5% * $6.009 = $6.820

    Expected sales volume in 2019 = (100 - 9%) * sales volume in 2018

    = 91% * 160,250

    =145827.5

    Sales budget for 2019 = $6.820 * 145,827.5

    = $994,543.55
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