Reference no: EM132617713

Imagine you are a store manager of a sports retail store. You have a responsibility to make a budget for next quarter and need to circulate it to the senior management, peer leaders, consultants and employees. The store manager is responsible for the operational profit that is calculated by subtracting the COGS, rent and store wages from the merchandise sales. Imagine the sales budget is 850000 for next quarter and COGS, rent and store wages (manager wages and casual wages) are 30%, 10% and 15% of sales budget respectively.

Two weeks prior to the quarter commencing, a water main burst outside the store entrance severely restricting customer traffic pass the door. Council advises that the restricted access will continue for the next three months. The sales for the two weeks showed a 25 % reduction in sales.

Problem a. Prepare budget of sports retail store highlighting an operational profit. Identify what methods you will use to circulate the budget for next quarter and what are the areas that receivers of the budget need to understand.

Problem b. Prepare the revised budget after knowing the situation a water main burst outside the store entrance