Violet sales corp reports the year end information

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Accounting
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Chapter 21 / Exercise PR21-2A
Accounting
Reeve/Warren
Expert Verified
9) Violet Sales Corp, reports the year-end information from 2019 as follows:Sales (35,500 units)$284,000Cost of goods sold105,000Gross margin179,000Operating expenses152,000Operating income$27,000Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. 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? (Round interim calculations to the nearest cent and the final answer to the nearest dollar.)A) $293,940B) $252,788C) $335,092D) $284,001Answer: Explanation: Budgeted sales in 2019: Selling prices in 2018 were $8 per unit ($284,000/35,500 units);increase selling price by 3.5% in 2019 means new selling price per unit in 2019 is $8.28 per unit; 2019 sales volume will be 35,500 units × 0.86 = 30,530 units times $8.28 per unit= $252,788
B
Diff: 3Objective: 4AACSB: Application of knowledge
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Accounting
The document you are viewing contains questions related to this textbook.
Chapter 21 / Exercise PR21-2A
Accounting
Reeve/Warren
Expert Verified
10) Violet Sales Corp, reports the year-end information from 2019 as follows:Sales ($35,625 units)285,000Cost of goods sold106,000Gross margin179,000Operating expenses158,000Operating income21,000Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. 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 cost of goods sold for 2019?
A
Diff: 3Objective: 4AACSB: Application of knowledge11) Violet Sales Corp, reports the year-end information from 2018 as follows:Sales (35,625 units)$285,000Cost of goods sold116,000Gross margin169,000Operating expenses154,000Operating income$15,000Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. 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.Should Violet increase the selling price in 2019?
D
Diff: 3Objective: 4AACSB: Application of knowledge12) Computer-based systems, like ERP, help managers budget for all manufacturing costs but lack the ability to help managers budget for non-manufacturing costs.

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