Question

Donald owns a small IT parts supply store, and he is in the process of creating a sales budget for next month. Donald predicts the following budgeted numbers: Sales Volume of 500 with a Budgeted Selling Price of $19 per unit. On average, Donald's store has experienced an average 4% rate of sales returns and discounts of 1.2% of the original selling price. What will the Budgeted Net Sales be for Donald next month?

1) $9006
2) $7980
3) $9386
4) $9272

Answer 1

The Budgeted Net Sales for Donald's store next month is calculated by subtracting the expected sales returns and discounts from the gross sales, resulting in $9,006.

Step-by-step explanation:

To calculate the Budgeted Net Sales of Donald’s IT parts supply store for the next month, we use the provided budgeted numbers and account for the predicted sales returns and discounts. Starting with a Sales Volume of 500 units and a Budgeted Selling Price of $19 per unit, the total sales without adjustments would be 500 units × $19/unit = $9,500. Next, we need to subtract the sales returns and discounts. With a 4% rate of sales returns and a 1.2% rate of discounts, that is 4% + 1.2% = 5.2% of total sales. Therefore, we calculate 5.2% of $9,500, which is $494.

To get the Net Sales, subtract the sales returns and discounts from the total sales: $9,500 - $494 = $9,006.

Therefore, the correct answer to the question is 1) $9006.