Information pertaining to ABC Company's sales budget is as follows: October November December Unit sales ...

Information pertaining to ABC Company's sales budget is as follows:

	October	November	December
Unit sales	1,800	2,000	2,800

Unit sale price		$ 10.00
Credit card sales		60%
Cash sales		40%

Fees paid to credit card companies		3%
Cost of goods sold		40%	of net sales

Note: Net sales is gross sales less fees paid to credit card companies.

Required:
Compute the budgeted sales revenue, cost of goods sold and
gross margin for the month of November.

Expert Solution

Answer to Q1

Total Budgeted Sales Revenue : Number of units * Sales Per unit

= 2,000*$10 ; $20,000

Fees Paid to Credit card company : Total Sales *3% ; $20,000*3%

= $600

Net Budgeted Revenue : Total Budgeted Sales - Fees Paid to credit card company

= $20,000-$600 ; $19,400

Cost of Goods sold : 40% on Total Budgeted Revenue

= $20,000*40% ; $8,000

Gross Margin : Net sales - Cost of Goods sold ; $19,400- $8,000

= $11,400

Note: The Price per unit is visible in the question screen is $10 & sales units are 2,0 asuumming it is 2,000 for november (attached screenshot if the question in case it is different have to change it in the calculation to re run the gross margin)

ekkarill92 answered 7 months ago

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