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15 June, 13:20

Cyber Security Systems had sales of 3,900 units at $95 per unit last year. The marketing manager projects a 25 percent increase in unit volume sales this year with a 20 percent price increase. Returned merchandise will represent 6 percent of total sales. What is your net dollar sales projection for this year?

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  1. 15 June, 14:28
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    The net dollar sales projection for this year=$522,405

    Explanation:

    Step 1

    Determine the initial price and initial quantity of sales as shown;

    initial price=$95

    initial quantity of sales=3,900 units

    Step 2

    Determine the projected price and projected quantity of sales as shown;

    projected price=initial price+percentage increase

    where;

    initial price=$95

    percentage increase = (20/100) * 95=$19

    replacing;

    projected price=95+19=$114

    projected quantity of sales=initial quantity+percentage increase

    where;

    initial quantity=3,900

    percentage increase = (25/100) * 3,900=$975

    replacing;

    projected quantity of sales=3,900+975=4,875 units

    Step 3

    Determine the total sales in terms of dollars;

    total sales = (114*4,875) = $555,750

    Step 4

    Determine net sales as follows;

    net sales=total sales-returned merchandise

    where;

    total sales=$555,750

    returned merchandise = (6/100) * 555,750=$33,345

    net sales = (555,750-33,345) = $522,405

    The net dollar sales projection for this year=$522,405
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