A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units. Total June sales are anticipated to be:
A. $63,000
B. $67,500
C. $61,250
D. $74,250
E. $60,000
The correct answer and explanation is :
The correct answer is A. \$63,000.
Explanation:
To solve this problem, we need to calculate the total sales revenue expected for June based on the projected sales volume and price per unit.
Step-by-step Breakdown:
- Projected Sales Volume:
- According to the forecast, 6,000 units are expected to be sold in June.
- Price per Unit:
- The price per unit is given as \$10.50.
- Sales Revenue Calculation:
- To calculate the total sales revenue, multiply the number of units to be sold by the price per unit:
$$
\text{Sales Revenue} = \text{Units Sold} \times \text{Price per Unit}
$$
$$
\text{Sales Revenue} = 6,000 \, \text{units} \times 10.50 \, \text{\$ per unit}
$$
$$
\text{Sales Revenue} = 63,000 \, \text{\$}
$$
Explanation of Other Information in the Question:
The desired ending inventory and beginning inventory details are not directly relevant for the sales forecast. They are typically used for inventory management or production planning, but they do not affect the calculation of sales revenue in this case.
- Beginning Inventory: The beginning inventory is stated as 1,000 units, but this is for inventory management.
- Desired Ending Inventory: The ending inventory is calculated as 15% higher than the beginning inventory, but again, this impacts production or purchase decisions, not the sales forecast.
Conclusion:
The sales forecast is based on the units expected to be sold in June and the price per unit. The calculation gives a total sales revenue of \$63,000. Therefore, the correct answer is A. \$63,000.