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In 2017, Canseco & Sons, a small environmental-testing firm, performed 12,000 radon tests for $310 each and 15,000 lead tests for $200 each. Because newer
In 2017, Canseco & Sons, a small environmental-testing firm, performed 12,000 radon tests for $310 each and 15,000 lead tests for $200 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 11% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Canseco feels that if he lowers his price for lead testing to $180 per test, he will have to face only a 5% decline in lead-test sales in 2018. Sales Budget For the Year Ended December 31, 2018 Total revenues Requirements Radon tests Lead tests Total Requirement 2. Prepare the sales budget assuming that Canseco lowers the price of a lead test 1. Prepare a 2018 sales budget for Canseco & Sons assuming that Canseco holds prices at 2017 levels. 2. Prepare a 2018 sales budget for Canseco & Sons assuming that Canseco lowers the price of a lead test to $180. Should Canseco lower the price of a lead test in 2018 if the company's goal is to maximize sales revenue? Sales Budget For the Year Ended December 31, 2018 Total revenues Radon tests Print Done Lead tests Total Canseco lower the price of a lead test in 2018 if its goal is to maximize sales revenue
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