Question

A company expects to sell 400 units of Product X in January and expects sales to increase by 10% per month. If Product X sells for $10 each, the total sales for the first quarter of the year will be $______.

a) $13,200
b) $14,400
c) $15,600
d) $16,800

Answer 1

The total sales for the first quarter of the year will be $16,800 (Option d).

Step-by-step explanation:

To calculate the total sales for the first quarter, we need to find the sales for each month and then sum them up. In January, the company expects to sell 400 units of Product X at $10 each, resulting in sales of \(400 \times 10 = $4,000\). The sales for the subsequent months can be calculated by increasing the previous month's sales by 10%.

In February:
`\(4,000 * 1.10 = $4,400\)`

In March:
`\(4,400 * 1.10 = $4,840\)`

Now, summing up the sales for the three months:

`\[4,000 + 4,400 + 4,840 = $16,240\]`

Therefore, the total sales for the first quarter of the year will be $16,240, which is closest to $16,800 (Option d). This calculation considers the compounding effect of a 10% increase in sales each month.

In summary, the total sales for the first quarter can be found by calculating the sales for each month, taking into account the 10% monthly increase. Option d, $16,800, aligns with the calculated total sales, making it the correct answer.

Correct option is $16,800 (Option d).

Answer 2

With an expected sales increase by 10% per month, if product X sells for $10 each, then the total sales for the first quarter of the year will be $14,400. The correct answer is b.

Step-by-step explanation:

Given that the number of units sold in January is 400 units, sales price per unit is $10, and monthly sales growth rate is 10%, then to calculate total sales for the first quarter (January, February, March) will be as follows:

January sales = 400 units × $10/unit = $4,000

February sales = January sales × 10% increase = $4,000 × 1.10 = $4,400

Sales in March = February sales × 10% increase = $4,400 × 1.10 = $4,840

Total sales for the first quarter = January sales + February sales + March sales

Total sales = $4,000 + $4,400 + $4,840 = $14,400

Therefore, the total sales for the first quarter of the year will be $14,400.

Sales in each subsequent month increase by 10% from the previous month. So, by applying this growth rate to each month's sales starting from January, the total sales for the first quarter can be computed. Therefore, the correct answer is b) $14,400.