Question

1. Kampman Company projects 2019 first quarter sales to be $ 20 comma 000 and increase by 5​% per quarter. Determine the projected sales for 2019 by quarter and in total. Round answers to the nearest dollar. 12. Fairfax Company manufactures and sells bicycles. A popular model is the XC. The company expects to sell 1 comma 400 XCs in 2018 and 900 XCs in 2019. At the beginning of 2018​, Friedman has 300 XCs in Finished Goods Inventory and desires to have 60​% of the next​ year's sales available at the end of the year. How many XCs will Fairfax need to produce in 2018​?

Answer 1

Answer and Explanation:

The computation of projected sales for 2019 by quarter and in total is shown below:-

                  Base sale amount         Increase sale     Quarter of projected

                                                           percentage                     sales

Quarter 1                                                                                $20,000

Quarter 2         $20,000                       5%                           $21,000

Quarter 3          $21,000                        5%                          $22,050

Quarter 4          $22,050                       5%                           $23,152.5

Total                                                                                        $86,202.5

Here, we have increased 5% every quarter to reach quarter of projected sales.

The computation of XCs to be produce is shown below:-

Budgeted XCs to be produced + Desired ending inventory Available -  opening finished inventory

= 1,400 + (900 × 60%) - 300

= 1,400 + 540 - 300

= 1,940 - 300

= 1,640