Sales Forecast and Flexible Budget Olympus, Inc , manufactures three models of mattresses the Sleepeze, the Plushette, and the Ultima Forecast sales for next year are 15,130 for the Sleepeze, 11,920 for the Plushette, and 5,500 for the Ultima Gene Dixon, vice president of sales, has provided the following information Salaries for his office (including himself at $64,200, a marketing research assistant at $39,950, and an administrative assistant at $23,900) are budgeted for $128,050 next year Depreciation on the offices and equipment is $18,150 per year Office supplies and other expenses total $22,500 per year Advertising has been steady at $21,650 per year However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high end mattress Gene believes the company should spend 10 percent of first year Ultima sales for a print and television campaign Commissions on the Sleepeze and Plushette lines are 3 percent of sales These commissions are paid to independent jobbers who sell the mattresses to retail stores Last year, shipping for the Sleepeze and Plushette lines averaged $45 per unit sold Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress Required 1 Suppose that Gene is considering three sales scenarios as follows Pessimistic Expected Optimistic Price Quantity Price Quantity Price Quantity Sleepeze $179 12,660 $204 15,130 $204 17,770 Plushette 302 10,300 352 11,920 362 14,520 Ultima 860 2,140 950 5,500 1,130 5,500 Prepare a revenue budget for the Sales Division for the coming year for each scenario Olympus, Inc Revenue Budget For the Coming Year Pessimistic Expected Optimistic Sleepeze $ $ $ Plushette Ultima Total sales $ $ $ 2 Prepare a flexible expense budget for the Sales Division for the three scenarios above If required, round answers to the nearest dollar Olympus, Inc Flexible Expense Budget For the Coming Year Pessimistic Expected Optimistic Salaries $ $ $ Depreciation Office supplies and other Advertising Sleepeze and Plushette Ultima Commissions Shipping Sleepeze Plushette Ultima Total $ $ $

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Sales Forecast and Flexible Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are

Sales Forecast and Flexible Budget

Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,130 for the Sleepeze, 11,920 for the Plushette, and 5,500 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:

Salaries for his office (including himself at $64,200, a marketing research assistant at $39,950, and an administrative assistant at $23,900) are budgeted for $128,050 next year.
Depreciation on the offices and equipment is $18,150 per year.
Office supplies and other expenses total $22,500 per year.
Advertising has been steady at $21,650 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign.
Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.
Last year, shipping for the Sleepeze and Plushette lines averaged $45 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress.

Required:

1. Suppose that Gene is considering three sales scenarios as follows:

	Pessimistic		Expected		Optimistic
	Price	Quantity	Price	Quantity	Price	Quantity
Sleepeze	$179	12,660	$204	15,130	$204	17,770
Plushette	302	10,300	352	11,920	362	14,520
Ultima	860	2,140	950	5,500	1,130	5,500

Prepare a revenue budget for the Sales Division for the coming year for each scenario.

Olympus, Inc.
Revenue Budget
For the Coming Year
	Pessimistic	Expected	Optimistic
Sleepeze	$	$	$
Plushette
Ultima
Total sales	$	$	$

2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.

Olympus, Inc.
Flexible Expense Budget
For the Coming Year
	Pessimistic	Expected	Optimistic
Salaries	$	$	$
Depreciation
Office supplies and other
Advertising:
Sleepeze and Plushette
Ultima
Commissions
Shipping:
Sleepeze
Plushette
Ultima
Total	$	$	$