Solve the following problems showing your work. Problem 2 Vicky is one of 25 sal

Question

Solve the following problems showing your work.

Problem 2

Vicky is one of 25 sales reps for Student Painters Inc., a local house painting service in Uburbia. Vicky's territory has a sales potential of $4,900,000, which is 5.0% of total company sales potential. Last year, Vicky sold $133,000 worth of services, corresponding to 2% of actual company sales. Student Painters wants to increase sales ($) by 13% this year.

QUESTION 1: What is the total sales potential for the company? (Answer: $98,000,000)

QUESTION 2: What was the total company sales last year? (Answer: $6,650,000)

QUESTION 3: What is the company's overall sales objective for this year? (Answer: $7,514,500)

QUESTION 4: What would be Vicky's sales goal this year, using the historical sales allocation method? (Answer: $150,290)

QUESTION 5: What would be Vicky's sales goal this year, using the sales potential allocation method? (Answer: $375,725)

QUESTION 6: What would be Vicky's sales goal this year, using the historical plus increase allocation method? (Answer: $176,225)

QUESTION 7: What would be Vicky's sales goal this year, using the weighted allocation method assuming a 50/50 split between historical and sales potential allocation methods? (Answer: $263,008)

QUESTION 8: Management thinks Vicky needs to improve her performance, and weights her sales goal according to a 15/85 split between historical and sales potential allocation methods. What will be Vicky's sales goal? (Answer: $341,910)

Explanation / Answer

1)

sales potential of 4900000 is 5% of company

hence company sales potential = 4900000/5% = 4900000/0.05 = 98000000

2)

133000 was 2% of company sales

hence total company sales = 133000/2% = 133000/0.02 = 6650000

3)

sales objective is 13% growth:

current sales = 6650000

13% grouwth = 6650000*13% + 6650000 = 7514500

4)

vicky did a sales of 2% in current year. Hence the sales target for vicky will also be 2% of company sales

2%of company target = 7514500*2% = 150290

5)

sales potential for vicky's area is 5%

sales potential allocation according to 5% of total company sales = 7514500*5% = 375725

7) since 50:50 split: answers from question 4 and 5 are added and divided by 2, to take an average:

(150290+375725)/2 = 263008

8) 15:85 split

15%*150290 + 85%*375725 = 22543.5 + 319366.25 = 341910

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

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