Question E22-26: Sales Budget Honolulu Shirt Shop has very seasonal sales. Assume that for next year 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 next year are expected to be 5% higher than current year sales. Unit sales by quarter for this year were as follows:

	Childrens	Womens	Mens	Total
Winter	80	80	140	300
Spring	180	120	160	460
Summer	500	600	260	1360
Fall	120	160	160	440
Total	880	960	720	2560

Childrens T-shirts sell for $10 each, womens sell for $15 each, and mens sell for $18.

Assuming a 5% increase in sales, prepare a sales budget for each quarter of the year using the following:

1. Average quarterly sales. (Hint: Winter quarter childrens shirts are 231 [800 x 1.05/4].)
2. Actual quarterly sales. (Hint: Winter quarter childrens shirts are 84 [80 x 1.05].)
3. Suggest advantages of each method