Alger Inc. manufactures six models of leaf blowers and weed eaters. Alger's budgeting team is finalizing the sales budget for the coming year. Sales in units and dollars for last year follow: Product LB-1 LB-2 WE-6 WE-7 WE-8 WE-9 Total Number Sold 14,700 18,000 25,200 16,200 6,900 4,000 Price ($) 32 20 15 10 18 22 Revenue $ 470,400 360,000 378,000 162,000 124,200 88,000 $1,582,600 In looking over the previous year's sales figures, Alger's sales budgeting team recalled the following: a. Model LB-1 is a newer version of the leaf blower with a gasoline engine. The LB-1 is mounted on wheels instead of being carried. This model is designed for the commercial market and did better than expected in its first year. As a result, the number of units of Model LB-1 to be sold was forecast at 350% of the previous year's units. b. Models WE-8 and WE-9 were introduced on July 1 of last year. They are lighter versions of the traditional weed eater and are designed for smaller households or condo units. Alger estimates that demand for both models will continue at the previous year's rate. c. A competitor has announced plans to introduce an improved version of model WE-6, Alger's traditional weed eater. Alger believes that the model WE-6 price must be cut 30% to maintain unit sales at the previous year's level. d. It was assumed that unit sales of all other models would increase by 5%, prices remaining constant. Required: Prepare a sales budget by product and in total for Alger Inc. for the coming year. Do not include a multiplication symbol as part of your answer. Alger Inc. Sales Budget
Alger Inc. manufactures six models of leaf blowers and weed eaters. Alger's budgeting team is finalizing the sales budget for the coming year. Sales in units and dollars for last year follow: Product LB-1 LB-2 WE-6 WE-7 WE-8 WE-9 Total Number Sold 14,700 18,000 25,200 16,200 6,900 4,000 Price ($) 32 20 15 10 18 22 Revenue $ 470,400 360,000 378,000 162,000 124,200 88,000 $1,582,600 In looking over the previous year's sales figures, Alger's sales budgeting team recalled the following: a. Model LB-1 is a newer version of the leaf blower with a gasoline engine. The LB-1 is mounted on wheels instead of being carried. This model is designed for the commercial market and did better than expected in its first year. As a result, the number of units of Model LB-1 to be sold was forecast at 350% of the previous year's units. b. Models WE-8 and WE-9 were introduced on July 1 of last year. They are lighter versions of the traditional weed eater and are designed for smaller households or condo units. Alger estimates that demand for both models will continue at the previous year's rate. c. A competitor has announced plans to introduce an improved version of model WE-6, Alger's traditional weed eater. Alger believes that the model WE-6 price must be cut 30% to maintain unit sales at the previous year's level. d. It was assumed that unit sales of all other models would increase by 5%, prices remaining constant. Required: Prepare a sales budget by product and in total for Alger Inc. for the coming year. Do not include a multiplication symbol as part of your answer. Alger Inc. Sales Budget
Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 35P
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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.
Question
Transcribed Image Text:WE-8
WE-9
124,200
88,000
$1,582,600
In looking over the previous year's sales figures, Alger's sales budgeting team recalled the following:
a. Model LB-1 is a newer version of the leaf blower with a gasoline engine. The LB-1 is mounted on wheels instead of being carried. This model is designed for the
commercial market and did better than expected in its first year. As a result, the number of units of Model LB-1 to be sold was forecast at 350% of the previous year's
units.
b. Models WE-8 and WE-9 were introduced on July 1 of last year. They are lighter versions of the traditional weed eater and are designed for smaller households or condo
units. Alger estimates that demand for both models will continue at the previous year's rate.
c. A competitor has announced plans to introduce an improved version of model WE-6, Alger's traditional weed eater. Alger believes that the model WE-6 price must be
cut 30% to maintain unit sales at the previous year's level.
d. It was assumed that unit sales of all other models would increase by 5%, prices remaining constant.
Required:
Total
Model Units
LB-1
LB-2
WE-6
WE-7
WE-8
WE-9
6,900
Total
4,000
Prepare a sales budget by product and in total for Alger Inc. for the coming year. Do not include a multiplication symbol as part of your answer.
Alger Inc.
Sales Budget
For the Coming Year
18
22
Price Total Sales
Transcribed Image Text:Sales Budget
Alger Inc. manufactures six models of leaf blowers and weed eaters. Alger's budgeting team is finalizing the sales budget for the coming year. Sales in units and dollars
for last year follow:
Product
LB-1
LB-2
WE-6
WE-7
WE-8
WE-9
Number Sold
Total
14,700
18,000
25,200
16,200
6,900
4,000
Price ($)
32
20
15
10
18
22
$1,582,600
In looking over the previous year's sales figures, Alger's sales budgeting team recalled the following:
a. Model LB-1 is a newer version of the leaf blower with a gasoline engine. The LB-1 is mounted on wheels instead of being carried. This model is designed for the
commercial market and did better than expected in its first year. As a result, the number of units of Model LB-1 to be sold was forecast at 350% of the previous year's
units.
b. Models WE-8 and WE-9 were introduced on July 1 of last year. They are lighter versions of the traditional weed eater and are designed for smaller households or condo
units. Alger estimates that demand for both models will continue at the previous year's rate.
c. A competitor has announced plans to introduce an improved version of model WE-6, Alger's traditional weed eater. Alger believes that the model WE-6 price must be
cut 30% to maintain unit sales at the previous year's level.
d. It was assumed that unit sales of all other models would increase by 5%, prices remaining constant.
Required:
Revenue
$ 470,400
360,000
378,000
162,000
124,200
88,000
Prepare a sales budget by product and in total for Alger Inc. for the coming year. Do not include a multiplication symbol as part of your answer.
Alger Inc.
Sales Budget
Ear the Coming Your
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