Question

At the beginning of the year, Goldenrod had beginning inventory of 2,000 scooters. Goldenrod estimates it will sell 5,000 units during the first quarter of the current year, with a 10% increase in sales each quarter. It is Goldenrod’s policy to maintain an ending inventory equal to 20% of the next quarter’s budgeted sales. Each scooter costs $100 to produce and sold for $150. How much is the budgeted sales revenue for the third quarter of the current year? $500,000. $825,000. $907,500. $605,000.

Answer 1

$907,500

Step-by-step explanation:

The budgeted sales for the 3rd quarter is a function of the number of scooters expected to be sold in the quarter and the unit selling price.

Given that the sales are expected to increase by 10% every quarter and the first quarter sales are 5000 units,

Second quarter sales

= 5000 + 10% * 5000

= 5500 units

3rd quarter sales

= 5500 + 10% * 5500

= 6050 units

Selling price per units given is $150

The budgeted sales revenue for the third quarter of the current year

= $150 * 6050

= $907,500