Sales Forecast and Flexible Budget Olympus, Inc. manufactures three models of ma

Question

Sales Forecast and Flexible Budget Olympus, Inc. manufactures three models of mattresses: the Sleepeze the Plushette, and the u tima. Forecast sales 4,590 for the Ultima. Gene Dixon, vice president of sales, has provided the following information or next year are 15 for the Sleepeze. · r e u hette and a. Salaries for his office (including himself at $65,500, a marketing research assistant at $39,200, and an administrative assistant at $25,200) are budgeted for $129,900 next year. b. Depreciation on the offices and equipment is $19,100 per year. c. Office supplies and other expenses total $21,350 per year. d. Advertising has been steady at $20,350 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 4 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 $80 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 Price Quantity Price Quantity Sleepeze $188 12,100 $206 15,120 $206 18,350 Plushette 297 9,920349 12,620 35714,070 Ultima 940 1,880 1,020 4,590 1,240 4,590 Prepare a revenue budget for the Sales Division for the coming year for each scenario.

Explanation / Answer

1 Revenue Budget Pessimistic Expected Optimistic Sleepeze 2274800 3114720 3780100 Plushette 2946240 4404380 5022990 Ultima 1767200 4681800 5691600 Total sales 6988240 12200900 14494690 2 Flexible Expense Budget Pessimistic Expected Optimistic Salaries 129900 129900 129900 Depreciation 19100 19100 19100 Office Supplies and other 21350 21350 21350 Advertising: Sleepeze and Plushette 20350 20350 20350 Ultima 353440 936360 1138320 Commissions 208842 300764 352124 Shipping: Sleepeze 665500 831600 1009250 Plushette 545600 694100 773850 Ultima 150400 367200 367200 Total 2114482 3320724 3831444

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.