Question: Howell & Sons, a small environmental testing firm, performed 12,400 radon tests for $320 each and 15,800 lead tests for $200 each. Because newer homes

Howell & Sons, a small environmental testing firm, performed 12,400 radon tests for $320 each and 15,800 lead tests for $200 each. Because newer homes are being build with lead free pipes, lead testing volume is expected to decrease by 12% next year. However, awareness of radon related health hazards is expected to result in a 5% increase in radon test volume each hear in the near future. Jim Howell feels that if he lowers his price test to $180 per test, he will have to face only a 6% decline in lead test sales in 2018.

Prepare a 2018 sales budget for Howell & Sons assuming that Howell holds prices at 2017 levels.

Prepare a 2018 Dale's budget for Howell & Sons assuming that Howell lowers the price of a lead test to $180. Should Howell lower the price of a lead test in 2018 if the company's goal is to maximize sales revenue?

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