Question

Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the dollar amount of electric stapler sales budgeted for February should be:Multiple Choice$179,978$166,400$173,056$160,000$187,177

Answer 1

Answer:

February sales = $173,056

Explanation:

units sold x sales price = sales revenue

10,000 x 16 = 160,000

Then we will apply the growth rate like compounding interest, because the growth accumulated over time:

$December\:Sales * (1+ growth)^{time} = February\:Sales$

time will be how many months past from December to February.

$160,000* (1.04)^{2} = February\:Sales$

February sales = 173056