PARTZ-BUDGET 3-Year Average Sales per month Canyon 20 15 Serra Terrain IN 19 Are 17 11 10 7 January February March Apr May June July Serene 12 11 10 7 7 2 12 16 15 12 6 5 5 5 1 2 9 3 H 7 5 September Other November December 5 9 13 5 10 5 11 10 10 16 9 11 11 14 Yates Motors prepare sales budgets on a product line Basis. To create reliable sales budgets, the dealership uses two main planning assumptions (4 marks) a. Future sales can be reasonably predicted based on the three year awerage of the types of GMC vehicles that are sold at the dealership b. An prediction of changes in customer activity and economic assessments can be used to determine how sales levels will change over the coming year Due to the economic recovery and the recent growth in vehicle sales. Yates Motors is expecting a 10% increase in vehicle sales across all models next year. Pricing and commission rates are expected to be as follows: Canyon Sierra 2335 26360 2000 2150 Acadia 3745 3000 Sales Price Dealer's Commission per Vehicle Salesman Commission per Vehicle Savanna Yon 387 90 3125 1890 236,50 30 127.00 Questions: 1. Based on the information provided, prepare: 1 Monthly Product Line sales budget for next year showing total sales ( 6 marks) ii. A monthly budget showing commission earned by the dealership for next year (6 marks) ili. A monthly budget showing the commission the dealership needs to pay to its sales people per month next year. (6 marks) iv. Expected gross profit per month for the next year (6 marks) 2. Is there anything that could be wrong with the planning assumptions used to create the sales budget? Discuss the weaknesses of each assumption and what you would do to improve those weaknesses. (4 marks) Yukon 3-Year Average Sales per month Canyon Sierra Terrain Acadia Savana 20 18 19 17 12 7 11 11 7 10 10 16 6 7 9 7 15 5 7 12 5 6 7 5 6 5 5 7 2 4 4 5 1 6 5 5 7 5 5 7 6 5 10 10 10 19 13 16 14 January February March April May June July August September October November December 11 11 12 12 8 7 9 11 Yates Motors prepare sales budgets on a product line Basis. To create reliable sales budgets, the dealership uses two main planning assumptions (4 marks) a. Future sales can be reasonably predicted based on the three year average of the types of GMC vehicles that are sold at the dealership. b. An prediction of changes in customer activity and economic assessments can be used to determine how sales levels will change over the coming year Due to the economic recovery and the recent growth in vehicle sales, Yates Motors is expecting a 10% increase in vehicle sales across all models next year. Pricing and commission rates are expected to be as follows: Canyon 23935 2000 Sierra 26260 2150 Terrain 27465 Acadia 37945 3000 Savanna Yukon 38790 49290 3125 Sales Price Dealer's Commission per Vehicle Salesman Commission per Vehicle 220 230,50 283.25 330 343.75 427.90 Questions: 1. Based on the information provided, prepare: i. Monthly Product Line sales budget for next year showing total sales ( 6 marks) ii. A monthly budget showing commission earned by the dealership for next year (6 marks) III. A monthly budget showing the commission the dealership needs to pay to its sales people per month next year. (6 marks) iv. Expected gross profit per month for the next year (6 marks) 2. Is there anything that could be wrong with the planning assumptions used to create the sales budget? Discuss the weaknesses of each assumption and what you would do to improve those weaknesses. (4 marks)
