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In 2020, Rouse & Sons, a small environmental-testing firm, performed 11,200 radon tests for $280 each and 15,000 load tests for $190 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 9% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $170 per test, he will have to face only a 6% decline in lead-test sales in 2021. Read the requirements Units sold in 2021 Selling price Radon tests 11,648 Lead tests 13,650 Total revenues 280 $ 3.261,440 190 2,593,500 5,854,940 Total C Requirements Requirement 2. Prepare the sales budget assuming that Rouse lowers the price of a load test to $170. Sales Budget For the Year Ended December 31, 2021 1. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse holds prices at 2020 levels. 2. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse lowers the price of a lead test to $170. Should Rouse lower the price of a lead test in 2021 if the company's goal is to maximize sales revenue? Radon tests Load tests Total Total revenues Print Done

In 2020, Rouse & Sons, a small environmental-testing firm, performed 11,200 radon tests for $280 each and 15,000 load tests for $190 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 9% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $170 per test, he will have to face only a 6% decline in lead-test sales in 2021. Read the requirements Units sold in 2021 Selling price Radon tests 11,648 Lead tests 13,650 Total revenues 280 $ 3.261,440 190 2,593,500 5,854,940 Total C Requirements Requirement 2. Prepare the sales budget assuming that Rouse lowers the price of a load test to $170. Sales Budget For the Year Ended December 31, 2021 1. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse holds prices at 2020 levels. 2. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse lowers the price of a lead test to $170. Should Rouse lower the price of a lead test in 2021 if the company's goal is to maximize sales revenue? Radon tests Load tests Total Total revenues Print Done

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 2020, Rouse & Sons, a small environmental-testing firm, performed 11,200 radon tests for $280 each and 15,000 load tests for $190 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 9% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $170 per test, he will have to face only a 6% decline in lead-test sales in 2021. Read the requirements Units sold in 2021 Selling price Radon tests 11,648 Lead tests 13,650 Total revenues 280 $ 3.261,440 190 2,593,500 5,854,940 Total C Requirements Requirement 2. Prepare the sales budget assuming that Rouse lowers the price of a load test to $170. Sales Budget For the Year Ended December 31, 2021 1. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse holds prices at 2020 levels. 2. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse lowers the price of a lead test to $170. Should Rouse lower the price of a lead test in 2021 if the company's goal is to maximize sales revenue? Radon tests Load tests Total Total revenues Print Done
Transcribed Image Text:In 2020, Rouse & Sons, a small environmental-testing firm, performed 11,200 radon tests for $280 each and 15,000 load tests for $190 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 9% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $170 per test, he will have to face only a 6% decline in lead-test sales in 2021. Read the requirements Units sold in 2021 Selling price Radon tests 11,648 Lead tests 13,650 Total revenues 280 $ 3.261,440 190 2,593,500 5,854,940 Total C Requirements Requirement 2. Prepare the sales budget assuming that Rouse lowers the price of a load test to $170. Sales Budget For the Year Ended December 31, 2021 1. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse holds prices at 2020 levels. 2. Prepare a 2021 sales budget for Rouse & Sons assuming that Rouse lowers the price of a lead test to $170. Should Rouse lower the price of a lead test in 2021 if the company's goal is to maximize sales revenue? Radon tests Load tests Total Total revenues Print Done
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