Q1. In 2014 , Rouse \& Sons, a small environmental-testing firm, performed 12,200 radon tests for $290 each and 16,400 lead tests for $240 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 10% next year. However, awareness of radon-related health hazards is expected to result in a 6% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $230 per test, he will have to face only a 7% decline in lead-test sales in 2015. a) Prepare a 2015 sales budget for Rouse \& Sons assuming that Rouse holds prices at 2014 levels. b) Prepare a 2015 sales budget for Rouse \& Sons assuming that Rouse lowers the price of a lead test to $230. Should Rouse lower the price of a lead test in 2015 if the company's goal is to maximize sales revenue? Q2. The McKnight Company expects sales in 2015 of 208,000 units of serving trays. McKnight's beginning inventory for 2015 is 18,000 trays, and its target ending inventory is 27,000 trays. Compute the number of trays budgeted for production in 2015 . Q1. In 2014 , Rouse \& Sons, a small environmental-testing firm, performed 12,200 radon tests for $290 each and 16,400 lead tests for $240 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 10% next year. However, awareness of radon-related health hazards is expected to result in a 6% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $230 per test, he will have to face only a 7% decline in lead-test sales in 2015. a) Prepare a 2015 sales budget for Rouse \& Sons assuming that Rouse holds prices at 2014 levels. b) Prepare a 2015 sales budget for Rouse \& Sons assuming that Rouse lowers the price of a lead test to $230. Should Rouse lower the price of a lead test in 2015 if the company's goal is to maximize sales revenue? Q2. The McKnight Company expects sales in 2015 of 208,000 units of serving trays. McKnight's beginning inventory for 2015 is 18,000 trays, and its target ending inventory is 27,000 trays. Compute the number of trays budgeted for production in 2015