Rerun Manufacturing Company is in the process of preparing its 2020 budget and is anticipating the following changes:30% increase in the number of units sold.20% increase in the direct material unit cost.15% increase in the direct labor cost per unit.10% increase in the manufacturing overhead cost per unit.14% increase in the sales price.7% increase in the administrative expenses.Rerun does not keep any units in inventory.The composition of the cost of finished products during 2019 for direct materials, direct labor, and factory overhead, respectively, was in the ratio of 3:2:1. The condensed income statement for 2019 is as follows: Sales (30,000 units)$450,000 Less sales returns 13,500 Net sales 436,500 Cost of goods
sold 306,000 Gross profit $130,500 Selling expenses$60,000 Admin.expenses 30,000 90,000 Net income $40,500 What are estimated net sales for 2020, assuming the sales return/gross sales relationship remains constant?
A. $646,893.
B. $571,500.
C. $567,450.
D. $585,000.
Answer: A
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