Question

Susie’s Radio Store has expected sales of $2,000,000 and plans to produce $2,500,000 worth of goods. To meet production, the business purchases $100,000 of new equipment. Actual sales for the year wind up being $1,800,000. For Susie’s Radio Store actual investment equals ______ and planned investment equals ______.

 

A. $600,000; $200,000

B. $800,000; $600,000

C. $500,000; $800,000

D. $650,000; $500,000

Answer 1

Actual investment;

=$\$2,500,000-\$1,800,000+\$100,000$

$=\$800,000$

Planned investment;

$=\$2,500,000-\$2,000,000+\$100,000$

$=\$600,000$