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Water Play, Inc. Part 2 Constant Demand and Seasonal Budgets 1. The company has decided they needed to create a full set of budget schedules including financial statements for the first year of operations based on an assumption of constant demand of 18,000 quarterly and 72,000 for the first year (appendices B-1 through B-11). A second set of budget schedules and financial statements based on expected unit sales of 15,000 in quarter one, 25,000 in quarter two, 20,000 in quarter three, and finally 12,000 in quarter four for a total of 72,000 for the year based on a seasonal demand pattern (appendices C-1 through C-11). We expect the same quarterly sales patterns in year two meaning 18,000 units per quarter under constant demand and 15,000 units in quarter one under seasonal demand. Compare the constant demand to the seasonal demand budget. Explain the major differences in each of the budget schedules, cash budget and financial statements on both a quarterly and annual basis. Remember the beginning and ending raw material and finished goods inventory units will cause differences in the budgets but also focus on the differences between acerual and cash timing figures. Appendix B-7 Water Play, Inc. Selling and General Administrative Budget January 1, 20XX 2 Year 2 Q1 18,000 Units sold Vanable SG&A cost / unit Total Variable SG&A cost Total Fixed SG&A cost Total SG&A cost Less: Depreciation Cash SG&A costs Q1 18,000 2,400 43,200,000 90,937,500 134,137,500 1,037,500 133,100,000 Q2 18,000 2,400 43,200,000 90,937,500 134,137,500 1,037,500 133,100,000 Q3 18,000 2,400 43,200,000 90,937,500 134,137,500 1,037,500 133.100,000 04 18,000 2,400 43,200,000 90,937,500 134,137,500 1,037,500 133,100,000 Annual Total 72,000 2,400 172,800,000 363.750,000 536,550,000 4,150,000 532,400,000 Bill Appendix Water Play, Inc. Selling and General Administrative Budget January 1, 20XX Year 2 Q1 15.000 Units sold Variable SG&A cost/unit Total Variable SG&A cost Total Fixed SG&A cost Total SG&A cost Less: Depreciation Cash SG&A costs Q1 15,000 2,400 36,000,000 90,937,500 126,937,500 1,037,500 125,900,000 Q2 25,000 2,400 60,000,000 90,937,500 150,937,500 1,037,500 149.900.000 Q3 20,000 2,400 48,000,000 90,937,500 138,937,500 1,037,500 137,900,000 Q4 12.000 2,400 28.800,000 90,937,500 119,737,500 1,037,500 118.700,000 Annual Total 72,000 2,400 172,800,000 363,750,000 536,550,000 4,150,000 532,400,000