Question

Terrill Company makes and sells two types of shaving cream: foamy, and gel. Last year, Foamy sold for $2.30 per can, and Gel sold for $3.15 per can. Sales volume was as follows:

	Quarter 1		Quarter 2		Quarter 3		Quarter 4
Foamy	76,000		80,000		82,000		70,000
Gel	50,000		80,000		90,000		60,000

Terrill expects sales for Foamy to increase by 5% over the same quarter last year. The Gel price will increase to $3.50, but aggressive advertising is expected to raise volume by 5% in quarters 1 and 4 and by 10% in quarters 2 and 3.

Prepare a sales budget for the coming year.

Terrill Company
Sales Budget
	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Foamy	$	$	$	$
Gel

Answer 1

Terill Company

Sales budget of FOAMY (in quantity and in value):

Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4
a. Sales (in units)	76,000	80,000	82,000	70,000
b. Revised sales (in units)	79,800	84,000	86,100	73,500
	(76,000 * 105%)	(80,000 * 105%)	(82,000 * 105%)	(70,000 * 105%)
c. Selling price per unit ($)	$2.30 per can	$2.30 per can	$2.30 per can	$2.30 per can
d. Total Sales ($) (b * c)	$1,83,540	$1,93,200	$1,98,030	$1,69,050

Sales budget of GEL (in quantity and in value):

Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4
a. Sales (in units)	50,000	80,000	90,000	60,000
b. Revised sales (in units)	52,500	88,000	99,000	63,000
	(50,000 * 105%)	(80,000 * 110%)	(90,000 * 110%)	(60,000 * 105%)
c. Selling price per unit ($)	$3.50 per can	$3.50 per can	$3.50 per can	$3.50 per can
d. Total Sales ($) (b * c)	$1,83,750	$ 3,08,000	$ 3,46,500	$ 2,20,500