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Chapter 2: 7BP (page 114)

Dodge Ball Bearings had sales of 15,000 units at $45 per unit last year. The marketing manager projects a 30 percent increase in unit volume sales this year with a 20 percent price decrease (due to a price reduction by a competitor). Returned merchandise will represent 8 percent of total sales. What is your net dollar sales projection for this year?

Short Answer

Expert verified

The net dollar sale projection of the company for this year is $645,840.

Step by step solution

01

Increase in units sold

Increaseinunitssold=Currentunitssold脳1+increment=15,000脳1+0.30=19,500

02

Decrease in unit price

Decreasedunitprice=Unitprice脳1-Decreaseratio=$45脳1-0.20=$36

03

Increased sales volume

Salesvolume=Increasedunitssold脳Decreasedunitprice=19,500脳$36=$702,000

04

Returned merchandise

Returnedmerchandise=Totalsalesvolume脳Returnpercentage=$702,000脳8%=$56,160

05

Net dollars sales projections of the company for this year

Netdollarsalesprojection=Totalsalesvolume-Returnedmerchandise=$702,000-$56,160=$645,840

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