mary's baskets company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. there are 4,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. the company keeps no work-in-process inventory. what amount of sales revenue will be reported on the 2019 budgeted income statement?
budgeted sales revenue will be 150,000
It expects to sell 30,000 at $5 each
so sales revenue would be
The beginning and ending inventory has no relevance. The question is already telling us how many unis the company expecs to sell and their unit price.
We just have to multiply
The correct answer is B.
Giving the following information:
Mary's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each.
Sales revenue is the result of multiplying the number of units sold for the selling price per unit:
Sales= 30,000*5= $150,000
The sales revenue that will be reported is $150000
As the beginning and ending target inventory is the same, the units sold by Mary's Baskets will remain at 30000 baskets.
Sales = Opening inventory in units + Production - Closing Inventory
Sales in units = 4000 + 30000 - 4000 = 30000 units
The revenue is a function of Sales quantity multiplied by the selling price. The selling price is $5 per unit.
Sales revenue = 30000 * 5 = $150000