Summer fun t-shirt shop has very seasonal sales for 2012

Reference no: EM13586592

Summer Fun T-shirt Shop has very seasonal sales. For 2012, management is trying to decide whether to establish a sales budget based on average sales or on sales estimated by quarter. The unit sales for 2012 are expected to be 10 percent higher than 2011 sales. Unit shirt sales by quarter for 2011 were as follows:

Childrens Womens Mens Total

Winter quarter 200 200 100 500

Spring quarter 200 250 200 650

Summer quarter 400 300 200 900

Fall quarter 200 250 100 550

Total 1,000 1,000 600 2,600

Children's T-shirts sell fo $5 each, womens sell for $9, and mens sell for $10

Required

Assuming a 10 percent increase in sales, prepare a sales budget for each quarter of 2012 using the following:

A. Average quarterly sales (Hint: Winter quarter childrens shirts are 275 (1,000x1.10/4))

B. Actual quarterly sales. (Hint: Winter quarter childrens shirts are 220 (200x1.10))

C. Suggest advantages of each methos.

Reference no: EM13586592

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