Netco's sales budget for the coming year is as follows. Item Volume in Units Sales Price Sales Revenue 200,000 150,000 300,000 Total sales revenue 1 2 3 Select one: O O $50 10 30 a. $850,000 b. $1,050,000 c. $550,000 d. $750,000 $10,000,000 1,500,000 Items 1 and 3 are different models of the same product. Item 2 is a complement to Item 1. Past experience indicates that the sales volume of Item 2 relative to the sales volume of Item 1 is fairly constant. Netco is considering a 10% price increase for the coming year for Item 1, which will cause sales of Item 1 to decline by 20% while simultaneously causing sales of Item 3 to increase by 5%. If Netco institutes the price increase for Item 1, total sales revenue will decrease by 9,000,000 $20,500,000
Netco's sales budget for the coming year is as follows. Item Volume in Units Sales Price Sales Revenue 200,000 150,000 300,000 Total sales revenue 1 2 3 Select one: O O $50 10 30 a. $850,000 b. $1,050,000 c. $550,000 d. $750,000 $10,000,000 1,500,000 Items 1 and 3 are different models of the same product. Item 2 is a complement to Item 1. Past experience indicates that the sales volume of Item 2 relative to the sales volume of Item 1 is fairly constant. Netco is considering a 10% price increase for the coming year for Item 1, which will cause sales of Item 1 to decline by 20% while simultaneously causing sales of Item 3 to increase by 5%. If Netco institutes the price increase for Item 1, total sales revenue will decrease by 9,000,000 $20,500,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Netco's sales budget for the coming year is as follows.
Item Volume in Units Sales Price Sales Revenue
1
200,000
2
150,000
300,000
3
Total sales revenue
Select one:
$50
10
30
a. $850,000
b. $1,050,000
c. $550,000
d. $750,000
$10,000,000
1,500,000
Items 1 and 3 are different models of the same product. Item 2 is a complement to Item 1. Past experience indicates that the sales volume of Item 2 relative to the sales volume of Item 1 is fairly constant. Netco is
considering a 10% price increase for the coming year for Item 1, which will cause sales of Item 1 to decline by 20% while simultaneously causing sales of Item 3 to increase by 5%. If Netco institutes the price
increase for Item 1, total sales revenue will decrease by
9,000,000
$20,500,000
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