Narchie Sells a Single Product for $50

question 53

Multiple Choice

Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.
In order to produce a target profit of $22,000, Narchie's dollar sales must total:

• A) $8,440.
• B) $21,100.
• C) $1,000,000.
• D) $1,055,000.
• E) None of the other answers is correct.

Understand the concept of budgeted cost of goods sold and how it is estimated.

Calculate budgeted cash receipts and disbursements from given data.

Determine the budgeted accounts receivable balance based on sales collection patterns.

Calculate the budgeted cost of raw material purchases based on production requirements and raw material costs.

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