Awesome T-Shirt Shop has very seasonal sales. For 2017, 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 2017 are expected to be 8 percent higher than 2016 sales. Unit shirt sales by quarter for 2016 were as follows:

Children’s T-shirts sell for \($8\) each, women’s sell for \($12\), and men’s sell for $13.

Required
Assuming an 8 percent increase in sales, prepare a sales budget for each quarter of 2017 using the following:

a. Average quarterly sales. (Hint: Winter quarter children’s shirts are 270 [1,000 X 1.08 + 4].)

b. Actual quarterly sales. (Hint: Winter quarter children’s shirts are 216 [200 X 1.08].)

c. Suggest advantages of each method.

Transcribed Image Text:

Winter quarter... Spring quarter Summer quarter. Fall quarter. Total Children's Women's Men's Total 200 200 100 500 200 250 200 650 400 300 200 900 200 250 100 550 1,000 1,000 600 2,600