Question

Linda owns and operates a landscaping business, and she is creating a sales budget for July, which is next month. Linda has had a good year and an even better summer thus far. She forecasts the following budgeted numbers: Sales volume of 350 (yards landscaped) with a budgeted selling price of $70 per yard that she services. Typically, Linda is able to leave all of her customers satisfied, but she is going to budget an expected return/refund rate of 5% of sales and discounts of 1% of the original selling price for customers who remit payment promptly. What will the Budgeted Net Sales be for Linda for July?

1) $23030.00
2) $24500.00
3) $24255.00
4) $23275.00

Answer 1

The Budgeted Net Sales for Linda in July will be $23,103.50.

Step-by-step explanation:

To calculate the budgeted net sales for Linda in July, we need to consider the sales volume, selling price, return/refund rate, and discounts.

Step 1: Calculate the total sales amount by multiplying the sales volume (350) with the selling price ($70): 350 x $70 = $24,500.

Step 2: Calculate the return/refund amount by multiplying the total sales amount with the return/refund rate (5%): $24,500 x 0.05 = $1,225.

Step 3: Calculate the discount amount by multiplying the original selling price ($70) with the discount rate (1%): $70 x 0.01 = $0.70.

Step 4: Calculate the total discount amount by multiplying the total sales amount ($24,500) with the discount amount ($0.70): $24,500 x $0.70 = $171.50.

Step 5: Subtract the return/refund amount ($1,225) and the discount amount ($171.50) from the total sales amount ($24,500): $24,500 - $1,225 - $171.50 = $23,103.50.

Therefore, the Budgeted Net Sales for Linda in July will be: $23,103.50.