Finch Corporation, which has three divisions, is preparing its sales budget. Eac

Question

Finch Corporation, which has three divisions, is preparing its sales budget. Each division expects a different growth rate because economic conditions vary in different regions of the country. The growth expectations per quarter are 5 percent for Cummings Division, 3 percent for Springfield Division, and 7 percent for Douglas Division. Required a. Complete the sales budget by filling in the missing amounts. b. Determine the amount of sales revenue that the company will report on its quarterly pro forma income statements. Complete this question by entering your answers in the tabs below Required A Required B Complete the sales budget by filling in the missing amounts. (Round your final answers to the nearest whole dollar amount.) Division First Quarter Second Quarter Third Quarter Fourth Quarter Cummings Division Springfield Division Douglas Division 130,000 350,000 250,000

Explanation / Answer

a.

Division

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Cummings Division

$       130,000

$              136,500

$           143,325

$               150,491

Springfield Division

$       350,000

$              360,500

$           371,315

$               382,454

Douglas Division

$       250,000

$              267,500

$           286,225

$               306,261

Quarterly sales budget for the division = Previous quarter sales budget x rate of growth expected for the division

Second quarter sales budget for Cummings Division = $ 130,000 x 1.05 = $ 136,500

And so on………

b.

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Sales revenue

$       730,000

$              764,500

$           800,865

$               839,206

Quarterly sales revenue for the company

= Sales Budget for Cummings Division + Springfield Division + Douglas Division

First quarter sales revenue for the company = $ 130,000 + $ 350,000 + $ 250,000 = $ 730,000

And so on ……..

Division

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Cummings Division

$       130,000

$              136,500

$           143,325

$               150,491

Springfield Division

$       350,000

$              360,500

$           371,315

$               382,454

Douglas Division

$       250,000

$              267,500

$           286,225

$               306,261

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