Question

*72) Prescher Company sells three products with the following seasonal sales pattern:*

Products
Quarter A B C
1 40% 30% 10%
2 30% 20% 30%
3 20% 20% 50%
4 10% 30% 10%

The annual sales budget shows forecasts for the different products and their expected selling price per unit to be as follows:

Product Units Selling Price
A 50,000 $ 16
B 125,000 40
C 62,500 24

Required:
Prepare a sales budget, in units and dollars, by quarters for the company for the coming year.

First Second Third Fourth
Quarter Quarter Quarter Quarter Total

Product A
Sales (in units) 20,000 15,000 10,000 5,000 50,000
- Price per unit $16 $16 $16 $16 $16
Sales (in dollars) $320,000 $240,000 $160,000 $80,000 $800,000

Product B
Sales (in units) 37,500 25,000 25,000 37,500 125,000
- Price per unit $40 $40 $40 $40 $40
Sales (in dollars) $1,500,000 $1,000,000 $1,000,000 $1,500,000 $5,000,000

Product C
Sales (in units) 6,250 18,750 31,250 6,250 62,500
- Price per unit $24 $24 $24 $24 $24
Sales (in dollars) $150,000 $450,000 $750,000 $150,000 $1,500,000

Answer 1

Calculating a sales budget involves multiplying the total units expected to be sold by their seasonal sales percentages for each quarter, and then multiplying the quarter sales by the selling price to get the dollar sales. The calculations are done for each product and then summed up for the total sales.

Step-by-step explanation:

To prepare a sales budget by quarters for the coming year for Prescher Company, we need to calculate the unit sales and dollar sales for each product A, B, and C. For each product, we multiply the seasonal sales pattern percentages by the total units expected to be sold annually.

Then, we multiply the units sold per quarter by the selling price per unit to find the dollar sales. After calculating these for each product and for each quarter, we sum up the quarters to obtain the total sales in units and dollars.

Example Calculation for Product A:

First Quarter Sales (in units): 50,000 units * 40% = 20,000 units
First Quarter Sales (in dollars): 20,000 units * $16/unit = $320,000

Following this method, we can compute the sales for quarters two, three, and four, as well as the total for Product A, and repeat the process for Products B and C.