Use the Following Information and the Percent-Of-Sales Method to Answer

question 104

Multiple Choice

Use the following information and the percent-of-sales method to answer the following question(s) .
Below is the 2004 year-end balance sheet for Banner,Inc.Sales for 2004 were $1,600,000 and are expected to be $2,000,000 during 2005.In addition,we know that Banner plans to pay $90,000 in 2005 dividends and expects projected net income of 4% of sales.(For consistency with the Answer selections provided,round your forecast percentages to two decimals. )

-Banner's projected retained earnings for 2005 are:

• A)$260,000.
• B)$280,000.
• C)$340,000.
• D)$350,000.

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Definitions:

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a good or service.

Weekly Wage Rate

The amount of compensation a worker receives on a weekly basis for their labor or services.

Elastic Supply

Describes a market situation where the quantity supplied changes significantly due to changes in price.

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.