Question

Susan handles the sales and marketing department for the organization and is currently busy in the marketing of new product. Based on her analysis, the company will achieve its target sales of 330 units in the first month of product's launch and 363 units in the following month. The cost of the product to the company is $210 per unit, and the company has decided to sell this product at maximum retail price (MRP) of $310. The company is expecting a sales return of 6% and factored in a prompt payment discount of 1.5% from its suppliers. What will the net sales be in the first month assuming Susan's assumptions are correct?

1) $65142
2) 94720
3) $102300
4) $96162

Answer 1

The net sales in the first month, considering the target sales, sales return, and prompt payment discount, will be $96162.

Step-by-step explanation:

To calculate the net sales in the first month, we need to consider the target sales, sales return, and prompt payment discount. The target sales for the first month is 330 units. The selling price per unit is $310, but we need to deduct the sales return of 6% (330 units * 6% = 19.8 units) and the prompt payment discount of 1.5% (330 units * 1.5% = 4.95 units) from the total units sold. The net sales in the first month will be:

Net Sales = (Total units sold - Sales return - Prompt payment discount) * Selling price per unit

Net Sales = (330 units - 19.8 units - 4.95 units) * $310 = $96162