[manikhan1984]

Sales forecasts
The sales units and selling prices per unit of the two products for March 2011 are as follows:

Crump Flake
Sales units 80,000 50,000
Selling price per unit £ 65.50 £104.00


Sales units of crump are expected to increase by 12½ % from 1 April 2011, and the company believes that the increased sales level will be maintained until the end of 2011. However, a decision has been made to continue to sell each crump at the current price of £65.50 per unit.

The company is planning to reduce the selling price of flake by 6% from 1 July 2011 and it expects that the price reduction will result in a 15% increase in the volume of sales of flakes from that month until the end of 2011.

All sales are made on credit terms. Sales customers are expected to pay for 65% of the sales in the month of sale, 32% in the month following the sale and the balance is expected to be uncollectible.