Question 1 Sales Budget Armonk is a wholesaler for three products, Tieg, Tang an

Question

Question 1 Sales Budget Armonk is a wholesaler for three products, Tieg, Tang and Zin The following information on these products relates to the year 20A Average Sales Sales Price Gross Profit in pounds) Per pound Products Tie 22,000 15,000 17,000 $23 17 12 per pound $14 12 Zin Demand for Zing has greatly increased and is expected to double in 20B Teg will probably experience a 30% increase in demand, while demand for Tang is expected to remain constant. In line with the industry, sales price for Tieg and Tang will increase by 5%; the sales price for Zing will increase by 15%. Unit costs of goods sold are expected to increase by the following amounts. Tieg, 17%; Tang, 1896; Zing, 1196 Required Prepare a schedule presenting budgeted sales revenue and gross profit, by product, for 20B

Explanation / Answer

Schedule of budgeted sales revenue and gross profit for 20B Products Sales (In Pounds) Average Sale price per pound Sales Cost of goods Sold per pound Cost of goods Sold Gross profit per pound Gross Profit Tieg              28,600 24.15        6,90,690 10.53            3,01,158 13.62        3,89,532 (22000X130%) (23X105%) (9X117%) Tang              15,000 17.85        5,10,510 5.90            1,68,740 11.95        3,41,770 (17X105%) (5X118%) Zing              34,000 13.80        3,94,680 6.66            1,90,476 7.14        2,04,204 (17000X 2) (12X115%) (6X111%) Total     15,95,880            6,60,374        9,35,506

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