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

Reference no: EM13572743

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 sales by quarter for 2011 were as follows:

Quarter Childens Womens Mens Total

Winter ---------- 200 -----------200 ---------100 ------ 500

Spring --------- 200 ------------250 ----------200 ---- 650

Summer ------ 400 ------------ 300 --------- 200 ----- 900

Fall --------------200-----------250--------------100--------550

Children's T-shirt's sell for $5 each, women's 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 children's shirts are 275 (1000 * 1.10 / 4)

b. actual quarterly sales. (Hint: Winter quarter children's shirts are 220 [200 x 1.10]

c. suggest advantages of each method

Reference no: EM13572743

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