=+10-19 KK Sales budget, service setting OBJECTIVE 3 In 2014, McGrath & Sons, a small environmental-testing firm, performed 12200 radon tests for $290 each and 16400 lead tests for $240 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 10% next year. However, awareness of radon-related health hazards is expected to result in a 6% increase in radon-test volume each year in M10_HORN3377_02_LT_C10.indd 402 2/09/13 3:46 PM the near future. Ron McGrath feels that if he lowers his price for lead testing to $230 per test, he will have to face only a 7% decline in lead-test sales in 2015.

Required 1 Prepare a 2015 sales budget for McGrath & Sons assuming that it holds prices at 2014 levels.