Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speak- ers) for the coming 5 quarters are as follows: S12L7 S12L5 First quarter, 20Xi Second quarter, 20X1 Third quarter, 20X1 Fourth quarter, 20X1 First quarter, 20X2 800 1,300 2,200 1,400 5,600 5,300 4,600 3,900 900 1,200 The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
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.
Refer to the information regarding Stillwater Designs above.
Required:
1. Prepare a sales budget for each quarter of 20X1 and for the year in total. Show sales by
product and in total for each time period.
2. CONCEPTUAL CONNECTION How will Stillwater Designs use this sales budget?
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