Sales budget, healthcare. Coronavirus disease 2019 (COVID-19) was first identified in December 2019 and resulted in an
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Sales budget, healthcare. Coronavirus disease 2019 (COVID-19) was first identified in December 2019 and resulted in an ongoing pandemic. There are currently few effective treatments for coronavirus with doctors relying on patients’ immune systems. In 2020, a UK-based biotech company, Synergy, produced 12,200 A tests for £290 each and 16,400 B tests for £240 each. The firm expects B tests sales to decrease by 10% next year. However, research into the virus is expected to increase A test sales by 6% each year in the future. Management at Synergy feels that if the price for B tests is lowered to £230 per test, the firm will see only a 7% decline in B test sales in 2021.
- 1. Prepare a 2021 sales budget for Synergy assuming it holds prices at 2020 levels.
- 2. Prepare a 2021 sales budget assuming Synergy lowers the price of B tests to £230. Should Synergy lower the price of B tests in 2021 if its goal is to maximize sales revenue?
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