Leaf Industries is preparing its master budget for 2013. Relevant data pertaining to its sales budget are as follows:
Sales for the year are expected to total 8,000,000 units. Quarterly sales are 25%, 30%, 15%, and 30%, respectively. The sales price is expected to be $2.00 per unit for the first quarter and then be increased to $2.20 per unit in the second quarter.
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
Total for Yr |
|
Unit Sales |
8,000,000 |
||||
Unit Selling Price |
|||||
Total Sales |
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
Total for Yr |
|
Unit Sales |
2,000,000 | 2,400,000 | 1,200,000 | 2,400,000 |
8,000,000 |
Unit Selling Price |
$2.00 | $2.20 | $2.20 | $2.20 | $2.15 |
Total Sales |
$4,000,000 | $5,280,000 | $2,640,000 | $5,280,000 |
$17,200,000 |
1st Quarter Unit Sales = 0.25 *8,000,000= 2,000,000 units
2nd Quarter Unit Sales = 0.30 *8,000,000= 2,400,000 units
3rd Quarter Unit Sales = 0.15 *8,000,000= 1,200,000 units
4th Quarter Unit Sales = 0.30 *8,000,000= 2,400,000 units
Total Sales for each quarter can be calculated by multiplying Price in each Quarter with Unit Sales
Total Sales for Year=Sum of Total Sales for each Quarter = $17,200,000
Unit Selling Price for Year= $17,200,000/8,000,000 = $2.15
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |
Unit Sales(a) | 2,000,000 | 2,400,000 | 1,200,000 | 2,400,000 | 8,000,000 |
Unit Selling Price (b) | 2.00 | 2.20 | 2.41 | 2.66 | 2.32 |
Total Sales | 4,000,000 | 5,280,000 | 2,904,000 | 6,384,000 | 18,568,000 |
Note:
Unit Sales Calculation:
Q1- 8,000,000*0.25
Q2-8,000,000*0.30
Q3-8,000,000*0.15
Q4-8,000,000*0.30
Unit selling price is expected to grow at a rate of 10%, this is indicative from increased unit sale price per unit in Q2 from Q1.
Growth- 2.20/2.00 =1.1
Q3- 2.20*1.1 =2.42
Q4-2.42*1.1=2.66
Year- (2.00+2.20+2.42+2.66)/4 =2.32
Let x be quarterly sales
So to find value of x :-
25x + 30x + 15x + 30x = 8,000,000
100x = 8,000,000
X = 80,000 units
1stQuarter |
2ndQuarter |
3rdQuarter |
4thQuarter |
Total for Yr |
|
Unit Sales |
2,000,000 ( 80000 * 25) |
2,400,000 (80000 *30) |
1,200,000 (80000 * 15) |
2,400,000 (80000* 30) |
8,000,000 |
Unit Selling Price |
$ 2.00 |
$ 2.20 |
$ 2.20 |
$ 2.20 |
|
Total Sales |
4,000,000 |
5,280,000 |
2,640,000 |
5,280,000 |
6,640,000 |
Leaf Industries is preparing its master budget for 2013. Relevant data pertaining to its sales budget...