Sales Forecast and Flexible BudgetOlympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepeze, 12,380 for the Plushette, and 4,890 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:Salaries for his office (including himself at $62,650, a marketing research assistant at $42,350, and an administrative assistant at $25,600) are budgeted for $130,600 next year.Depreciation on the offices and equipment is $21,800 per year.Office supplies and other expenses total $20,500 per year.Advertising has been steady at $20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign.Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.Last year, shipping for the Sleepeze and Plushette lines averaged $50 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress.Required:1. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic PriceQuantity PriceQuantity PriceQuantitySleepeze$18512,460 $20915,000 $20917,980Plushette29310,070 33512,380 34613,990Ultima9001,950 1,0304,890 1,2004,890Prepare a revenue budget for the Sales Division for the coming year for each scenario.Olympus, Inc.Revenue BudgetFor the Coming Year PessimisticExpectedOptimisticSleepeze Plushette Ultima Total sales 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.Olympus, Inc.Flexible Expense BudgetFor the Coming Year PessimisticExpectedOptimisticSalaries Depreciation Office supplies and other Advertising: Sleepeze and Plushette Ultima Commissions Shipping: Sleepeze Plushette Ultima Total Sales Forecast and Flexible BudgetOlympus, Inc., manufactures three models of mattresses: the Sleepzee, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepzee, 12,380 for the Plushette, and 4,890 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:a. Salaries for his office (including himself at $62,650, a marketing research assistant at $42,350, and an administrative assistant at $25,600) are budgeted for $130,600 next year.b. Depreciation on the offices and equipment is $21,800 per year.c. Office supplies and other expenses total $20,500 per year.d. Advertising has been steady at $20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign.e. Commissions on the Sleepzee and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.f. Last year, shipping for the Sleepzee and Plushette lines averaged $50 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress.Required:1. Suppose that Gene is considering three sales scenarios as follows:| | Pessimistic | Expected | Optimistic ||-----------------|-----------------------|-------------------|----------------------|| | Price | Quantity | Price | Quantity | Price | Quantity || Sleepzee | $185 | 12,460 | $209 | 15,000 | $209 | 17,980 || Plushette | $293 | 10,070 | $335 | 12,380 | $346 | 13,990 || Ultima | $900 | 1,950 | $1,030| 4,890 | $1,200| 4,890 |Prepare a revenue budget for the Sales Division for the coming year for each scenario.**Olympus, Inc. Revenue Budget for the Coming Year**| | P **Olympus, Inc. Flexible Expense Budget For the Coming Year**This is a table used to prepare a flexible expense budget for the Sales Division, covering three scenarios: Pessimistic, Expected, and Optimistic. The aim is to forecast expenses under different conditions, rounded to the nearest dollar.**Budget Categories:**- **Salaries** - Columns for Pessimistic, Expected, and Optimistic scenarios with empty input fields.- **Depreciation** - Similar columns for the three scenarios with empty input fields.- **Office Supplies and Other** - Columns that allow input for predicted expenses based on different scenarios.**Advertising:**- **Sleepeze and Plushette** - Input fields for advertising expenses in each scenario.- **Ultima** - Spaces for costs associated with the Ultima product under varying conditions.**Commissions:**- Input sections corresponding to each scenario.**Shipping:**- **Sleepeze** - Areas to forecast shipping costs for the Sleepeze product line.- **Plushette** - Shipping budget input fields for the Plushette brand.- **Ultima** - Forecasting shipping expenses for Ultima in the respective scenarios.**Total:**- Sum of all expenses for each scenario, where inputs will be filled to provide overall totals.This table facilitates budgeting by allowing planners to input different potential costs and adjust them according to business expectations, thereby aiding in strategic planning and resource allocation.

Budget is a plan that shows how much money an organization expects to earn and spend during a…

Sales Forecast and Flexible Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepeze, 12,380 for the Plushette, and 4,890 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: Salaries for his office (including himself at $62,650, a marketing research assistant at $42,350, and an administrative assistant at $25,600) are budgeted for $130,600 next year. Depreciation on the offices and equipment is $21,800 per year. Office supplies and other expenses total $20,500 per year. Advertising has been steady at $20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign. Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. Last year, shipping for the Sleepeze and Plushette lines averaged $50 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic Price Quantity Price Quantity Price Quantity Sleepeze $185 12,460 $209 15,000 $209 17,980 Plushette 293 10,070 335 12,380 346 13,990 Ultima 900 1,950 1,030 4,890 1,200 4,890 Prepare a revenue budget for the Sales Division for the coming year for each scenario. Olympus, Inc.Revenue BudgetFor the Coming Year Pessimistic Expected Optimistic Sleepeze Plushette Ultima Total sales 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar. Olympus, Inc.Flexible Expense BudgetFor the Coming Year Pessimistic Expected Optimistic Salaries Depreciation Office supplies and other Advertising: Sleepeze and Plushette Ultima Commissions Shipping: Sleepeze Plushette Ultima Total

Sales Forecast and Flexible Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepeze, 12,380 for the Plushette, and 4,890 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: Salaries for his office (including himself at $62,650, a marketing research assistant at $42,350, and an administrative assistant at $25,600) are budgeted for $130,600 next year. Depreciation on the offices and equipment is $21,800 per year. Office supplies and other expenses total $20,500 per year. Advertising has been steady at $20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign. Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. Last year, shipping for the Sleepeze and Plushette lines averaged $50 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic Price Quantity Price Quantity Price Quantity Sleepeze $185 12,460 $209 15,000 $209 17,980 Plushette 293 10,070 335 12,380 346 13,990 Ultima 900 1,950 1,030 4,890 1,200 4,890 Prepare a revenue budget for the Sales Division for the coming year for each scenario. Olympus, Inc.Revenue BudgetFor the Coming Year Pessimistic Expected Optimistic Sleepeze Plushette Ultima Total sales 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar. Olympus, Inc.Flexible Expense BudgetFor the Coming Year Pessimistic Expected Optimistic Salaries Depreciation Office supplies and other Advertising: Sleepeze and Plushette Ultima Commissions Shipping: Sleepeze Plushette Ultima Total

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Sales Forecast and Flexible Budget

Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepeze, 12,380 for the Plushette, and 4,890 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:

Salaries for his office (including himself at $62,650, a marketing research assistant at $42,350, and an administrative assistant at $25,600) are budgeted for $130,600 next year.
Depreciation on the offices and equipment is $21,800 per year.
Office supplies and other expenses total $20,500 per year.
Advertising has been steady at $20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign.
Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.
Last year, shipping for the Sleepeze and Plushette lines averaged $50 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress.

Required:

1. Suppose that Gene is considering three sales scenarios as follows:

	Pessimistic		Expected		Optimistic
	Price	Quantity		Price	Quantity	Price	Quantity
Sleepeze	$185	12,460		$209	15,000	$209	17,980
Plushette	293	10,070		335	12,380	346	13,990
Ultima	900	1,950		1,030	4,890	1,200	4,890

Prepare a revenue budget for the Sales Division for the coming year for each scenario.

Olympus, Inc.Revenue BudgetFor the Coming Year

	Pessimistic	Expected	Optimistic
Sleepeze
Plushette
Ultima
Total sales

2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.

Olympus, Inc.Flexible Expense BudgetFor the Coming Year

	Pessimistic	Expected	Optimistic
Salaries
Depreciation
Office supplies and other
Advertising:
Sleepeze and Plushette
Ultima
Commissions
Shipping:
Sleepeze
Plushette
Ultima
Total

Sales Forecast and Flexible Budget

Olympus, Inc., manufactures three models of mattresses: the Sleepzee, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepzee, 12,380 for the Plushette, and 4,890 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:

a. Salaries for his office (including himself at $62,650, a marketing research assistant at $42,350, and an administrative assistant at $25,600) are budgeted for $130,600 next year.

b. Depreciation on the offices and equipment is $21,800 per year.

c. Office supplies and other expenses total $20,500 per year.

d. Advertising has been steady at $20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign.

e. Commissions on the Sleepzee and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.

f. Last year, shipping for the Sleepzee and Plushette lines averaged $50 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress.

Required:

1. Suppose that Gene is considering three sales scenarios as follows:

| | Pessimistic | Expected | Optimistic |
|-----------------|-----------------------|-------------------|----------------------|
| | Price | Quantity | Price | Quantity | Price | Quantity |
| Sleepzee | $185 | 12,460 | $209 | 15,000 | $209 | 17,980 |
| Plushette | $293 | 10,070 | $335 | 12,380 | $346 | 13,990 |
| Ultima | $900 | 1,950 | $1,030| 4,890 | $1,200| 4,890 |

Prepare a revenue budget for the Sales Division for the coming year for each scenario.

**Olympus, Inc. Revenue Budget for the Coming Year**

| | P

Transcribed Image Text:**Olympus, Inc. Flexible Expense Budget For the Coming Year** This is a table used to prepare a flexible expense budget for the Sales Division, covering three scenarios: Pessimistic, Expected, and Optimistic. The aim is to forecast expenses under different conditions, rounded to the nearest dollar. **Budget Categories:** - **Salaries** - Columns for Pessimistic, Expected, and Optimistic scenarios with empty input fields. - **Depreciation** - Similar columns for the three scenarios with empty input fields. - **Office Supplies and Other** - Columns that allow input for predicted expenses based on different scenarios. **Advertising:** - **Sleepeze and Plushette** - Input fields for advertising expenses in each scenario. - **Ultima** - Spaces for costs associated with the Ultima product under varying conditions. **Commissions:** - Input sections corresponding to each scenario. **Shipping:** - **Sleepeze** - Areas to forecast shipping costs for the Sleepeze product line. - **Plushette** - Shipping budget input fields for the Plushette brand. - **Ultima** - Forecasting shipping expenses for Ultima in the respective scenarios. **Total:** - Sum of all expenses for each scenario, where inputs will be filled to provide overall totals. This table facilitates budgeting by allowing planners to input different potential costs and adjust them according to business expectations, thereby aiding in strategic planning and resource allocation.

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