Answer the Following Questions Using the Information Below:
Newcastle Enterprises

question 53

Multiple Choice

Answer the following questions using the information below:
Newcastle Enterprises reports the year-end information from 2018 as follows:
$\begin{array}{lr}\text { Sales (70 000 units) } & \$ 720000 \\\text { Cost of goods sold } & \underline{370000} \\& \\\text { Gross margin } & 350000 \\\text { Operating expenses } & \underline{200000} \\& \\\text { Operating profit } & \underline{ \$ 150000}\end{array}$
Newcastle is developing the 2019 budget.In 2019 the company would like to increase selling prices by 4%,and as a result expects a decrease in sales volume of 10%.All other operating expenses are expected to remain constant.Assume that COGS is a variable cost and that operating expenses are a fixed cost.
-What is budgeted sales for 2019?

• A)$504 000
• B)$673 920
• C)$582 400
• D)$720 000

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Definitions:

Depreciable Cost

The cost of a fixed asset minus its salvage value, over which the cost is allocated across the useful life of the asset.

Actual Yearly Output

The total quantity of products or services produced by a company within a specific year.

Estimated Output

The projected quantity of goods or services a company plans to produce in a specific period.

Depreciable Cost

The total cost of a tangible asset minus its estimated salvage value, representing the amount that can be depreciated over the life of the asset.