Question

Esther Baskets Company expects to manufacture and sell 20,000 baskets in 2016 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 5,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2016 budgeted income statement?*

A) $105,000
B) $100,000
C) $95,000
D) $55,000

Answer 1

The sales revenue reported on the 2016 budgeted income statement is $100,000.

Step-by-step explanation:

To calculate the sales revenue reported on the 2016 budgeted income statement, we need to consider the number of baskets sold and the selling price. The company expects to sell 20,000 baskets in 2016 for $5 each.

The total sales revenue can be calculated by multiplying the number of baskets sold by the selling price:

Sales Revenue = Number of Baskets Sold × Selling Price

Sales Revenue = 20,000 × $5

Sales Revenue = $100,000

Therefore, the amount of sales revenue reported on the 2016 budgeted income statement is $100,000, which corresponds to option B.