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Titan Fishing Boats had product sales for the current year as follows: Q1 2,000 boats; Q2 2,400 boats; Q3 1,800 boats; Q4 1,200 boats. Current selling price is $5,000 per boat. A strong economy and specific market initiatives at Titan for next year indicate that sales volume is expected to increase by 2% per quarter cumulatively for each quarter and sales price will increase by 4% per boat. The sales revenue forecast for Q4 next year would be:

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anthougo

Answer:

Titan Fishing Boats

The sales revenue forecast for Q4 next year would be

= $6,364,800

Explanation:

a) Data and Calculations:

       Current Year    Next Year

Q1   2,000 boats      2,040 boats (2,000 * 1.02)

Q2  2,400 boats      2,448 boats (2,400 * 1.02)

Q3   1,800 boats      1,836 boats (1,800 * 1.02)

Q4   1,200 boats      1,224 boats (1,200 * 1.02)

Expected increase per quarter = 2% cumulatively

Selling price per boat = $5,000

Expected increase in selling price = 4% ($200)

New selling price per boat = $5,200

The sales revenue forecast for Q4 next year would be = $6,364,800 ($5,200 * 1,224)

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