ACCOUNTING
Multiple Choice
Ossmann Enterprises reports year-end information from 20x4 as follows:
Sales (80,000 units) $480,000
Cost of goods sold 320,000
Gross margin 160,000
Operating expenses 130,000
Operating income $ 30,000
Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
What is budgeted sales for 20x5?
a. $518,400
b. $533,333
c. $466,560
d. $432,000
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