Sales Forecast and Flexible Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,010 for the Sleepeze, 12,390 for the Plushette, and 4,920 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: a. Salaries for his office (including himself at $64,350, a marketing research assistant at $37,000, and an administrative assistant at $25,950) are budgeted for $127,300 next year. b. Depreciation on the offices and equipment is $17,650 per year. c. Office supplies and other expenses total $19,050 per year. d. Advertising has been steady at $20,700 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 20 percent of first-year Ultima sales for a print and television campaign. e. Commissions on the Sleepeze and Plushette lines are 5 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. f. Last year, shipping for the Sleepeze and Plushette lines averaged $55 per unit sold. Gene expects the Ultima line to ship for $75 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic Price Quantity Quantity Price Quantity $193 15,010 $193 18,260 356 12,390 365 14,280 960 4,920 1,170 4,920 Sleepeze $175 12,530 Plushette 299 10,410 880 1,830 Ultima Price Quantity Price Prepare a revenue budget for the Sales Division for the coming year for each scenario. Olympus, Inc. Revenue Budget For the Coming Year Sleepeze Plushette Ultima Total sales Pessimistic Expected Optimistic 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar. Olympus, Inc. Flexible Expense Budget
Sales Forecast and Flexible Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,010 for the Sleepeze, 12,390 for the Plushette, and 4,920 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: a. Salaries for his office (including himself at $64,350, a marketing research assistant at $37,000, and an administrative assistant at $25,950) are budgeted for $127,300 next year. b. Depreciation on the offices and equipment is $17,650 per year. c. Office supplies and other expenses total $19,050 per year. d. Advertising has been steady at $20,700 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 20 percent of first-year Ultima sales for a print and television campaign. e. Commissions on the Sleepeze and Plushette lines are 5 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. f. Last year, shipping for the Sleepeze and Plushette lines averaged $55 per unit sold. Gene expects the Ultima line to ship for $75 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic Price Quantity Quantity Price Quantity $193 15,010 $193 18,260 356 12,390 365 14,280 960 4,920 1,170 4,920 Sleepeze $175 12,530 Plushette 299 10,410 880 1,830 Ultima Price Quantity Price Prepare a revenue budget for the Sales Division for the coming year for each scenario. Olympus, Inc. Revenue Budget For the Coming Year Sleepeze Plushette Ultima Total sales Pessimistic Expected Optimistic 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar. Olympus, Inc. Flexible Expense Budget
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.
Olympus, Inc.
Flexible Expense Budget
For the Coming Year
Salaries
Depreciation
Office supplies and other
Advertising:
Sleepeze and Plushette
Ultima
Commissions
Shipping:
Total
Sleepeze
Plushette
Ultima
Pessimistic Expected Optimistic
DUC JED
EE
10000 000
Transcribed Image Text:Sales Forecast and Flexible Budget
Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,010 for the Sleepeze, 12,390 for the Plushette, and 4,920 for the Ultima. Gene Dixon, vice president of
sales, has provided the following information:
a. Salaries for his office (including himself at $64,350, a marketing research assistant at $37,000, and an administrative assistant at $25,950) are budgeted for $127,300 next year.
b. Depreciation on the offices and equipment is $17,650 per year.
c. Office supplies and other expenses total $19,050 per year.
d. Advertising has been steady at $20,700 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 20
percent of first-year Ultima sales for a print and television campaign.
e. Commissions on the Sleepeze and Plushette lines are 5 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.
f. Last year, shipping for the Sleepeze and Plushette lines averaged $55 per unit sold. Gene expects the Ultima line to ship for $75 per unit sold since this model features a larger mattress.
Required:
1. Suppose that Gene is considering three sales scenarios as follows:
Optimistic
Expected
Price Quantity
$193 15,010
356 12,390
Price Quantity
Sleepeze $175 12,530
Plushette
299 10,410
Ultima
Pessimistic
Sleepeze
Plushette
Ultima
880 1,830
Prepare a revenue budget for the Sales Division for the coming year for each scenario.
Olympus, Inc.
Revenue Budget
For the Coming Year
960 4,920
Total sales
Price Quantity
$193 18,260
365 14,280
1,170 4,920
Pessimistic Expected Optimistic
2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.
Olympus, Inc.
Flexible Expense Budget
For the Coming Year
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