Sales Budget
Summer Fun T-Shirt Shop has very seasonal sales. For 2014,
management is trying to decide whether to establish a sales budget
based on average sales or on sales estimated by quarter. The unit
sales for 2014 are expected to be 10 percent higher than 2013
sales. Unit shirt sales by quarter for 2013 were as follows:
Children's | Women's | Men's | Total | |
---|---|---|---|---|
Winter quarter | 200 | 200 | 100 | 500 |
Spring quarter | 200 | 250 | 200 | 650 |
Summer quarter | 400 | 300 | 200 | 900 |
Fall quarter | 200 | 250 | 100 | 550 |
Total | 1,000 | 1,000 | 600 | 2,600 |
Children’s T-shirts sell for $10 each, women’s sell for $14, and
men’s sell for $15.
Assuming a 10 percent increase in sales, prepare a sales budget for each quarter of 2014 using the following:
a. Average quarterly sales. (Hint: Winter quarter children’s shirts are 275 [1,000 X 1.10/4].)
Summer Fun T-Shirt Shop Sales Budget (Average) Quarterly for 2014 Quarter |
|||||
---|---|---|---|---|---|
Winter | Spring | Summer | Fall | Year Totals | |
Units: | |||||
Children's | Answer | Answer | Answer | Answer | Answer |
Women's | Answer | Answer | Answer | Answer | Answer |
Men's | Answer | Answer | Answer | Answer | Answer |
Dollars: | |||||
Children's | Answer | Answer | Answer | Answer | Answer |
Women's | Answer | Answer | Answer | Answer | Answer |
Men's | Answer | Answer | Answer | Answer | Answer |
Totals | Answer | Answer | Answer | Answer | Answer |
b. Actual quarterly sales. (Hint: Winter quarter children’s shirts
are 220 [200 X 1.10].)
Summer Fun T-Shirt Shop Sales Budget (Average) Quarterly for 2014 Quarter |
|||||
---|---|---|---|---|---|
Winter | Spring | Summer | Fall | Year Totals | |
Units: | |||||
Children's | Answer | Answer | Answer | Answer | Answer |
Women's | Answer | Answer | Answer | Answer | Answer |
Men's | Answer | Answer | Answer | Answer | Answer |
Dollars: | |||||
Children's | Answer | Answer | Answer | Answer | Answer |
Women's | Answer | Answer | Answer | Answer | Answer |
Men's | Answer | Answer | Answer | Answer | Answer |
Totals | Answer | Answer | Answer | Answer | Answer |
c. Suggest advantages of each method.
Which one is not an advantage to preparing a sales budget using average quarterly sales.
Reduces the possibility of being out of stock in most quarters
Minimizes the investment in inventory during low-sales quarters
Smoothes the investment in inventory throughout the year
Simplifies the purchasing of inventory
Summer Fun T-shirt Shop | |||||
Sales Budget -Average | |||||
Quartly for 2017 | |||||
Quarter | |||||
Winter | Spring | Summer | Fall | total | |
Children's (last year sale, 1000*1.10)/4 | 275 | 275 | 275 | 275 | 1100 |
Women's (last year sale,1000*1.10)/4 | 275 | 275 | 275 | 275 | 1100 |
Men's (last year sale,600 *1.10)/4 | 165 | 165 | 165 | 165 | 660 |
Dollar | |||||
Children's (Unit*10) | $2,750.00 | $2,750.00 | $2,750.00 | $2,750.00 | $11,000.00 |
Women's(Unit*14) | $3,850.00 | $3,850.00 | $3,850.00 | $3,850.00 | $15,400.00 |
Men's (Unit*15) | $2,475.00 | $2,475.00 | $2,475.00 | $2,475.00 | $9,900.00 |
Summer Fun T-shirt Shop | |||||
Sales Budget -Average | |||||
Quartly for 2014 | |||||
Quarter | |||||
Winter | Spring | Summer | Fall | total | |
Children's (last year sale*1.10) | 220 | 220 | 440 | 220 | 1100 |
Women's (last year sale*1.10) | 220 | 275 | 330 | 275 | 1100 |
Men's (last year sale*1.10) | 110 | 220 | 220 | 110 | 660 |
Dollar | |||||
Children's (Unit*10) | $2,200.00 | $2,200.00 | $4,400.00 | $2,200.00 | $11,000.00 |
Women's(Unit*14) | $3,080.00 | $3,850.00 | $4,620.00 | $3,850.00 | $15,400.00 |
Men's (Unit*15) | $1,650.00 | $3,300.00 | $3,300.00 | $1,650.00 | $9,900.00 |
Correct answer will be
Minimize the investment in inventory during low sales quarter
Sales Budget Summer Fun T-Shirt Shop has very seasonal sales. For 2014, management is trying to...
Sales Budget Summer Fun T-Shirt Shop has very seasonal sales. For 2014, management is trying to decide whether to establish a sales budget based on average sales or on sales estimated by quarter. The unit sales for 2014 are expected to be 10 percent higher than 2013 sales. Unit shirt sales by quarter for 2013 were as follows: Children's Men's Total Winter quarter 200 200 100 500 Spring quarter 200 250 200 650 Summer quarter 400 300 200 900 Fall...
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