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 14,830 for the Sleepeze, 11,810 for the Plushette, and 5,020 for the Ultima Gene Dixon, vice president of sales, has provided the following information Salaries for his office (including himself at $67,050, a marketing research assistant at $36,900, and an administrative assistant at $22,900) are budgeted for $126,850 next year Depreciation on the offices and equipment is $21,600 per year Office supplies and other expenses total $20,650 per year Advertising has been steady at $19,200 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 4 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 $50 per unit sold Gene expects the Ultima line to ship for $70 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 $172 12,540 $190 14,830 $190 17,880 Plushette 294 10,500 337 11,810 348 14,110 Ultima 920 2,120 1,010 5,020 1,230 5,020 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 14,830 for the Sleepeze, 11,810 for the Plushette, and 5,020 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:

Salaries for his office (including himself at $67,050, a marketing research assistant at $36,900, and an administrative assistant at $22,900) are budgeted for $126,850 next year.
Depreciation on the offices and equipment is $21,600 per year.
Office supplies and other expenses total $20,650 per year.
Advertising has been steady at $19,200 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 4 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 $50 per unit sold. Gene expects the Ultima line to ship for $70 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	$172	12,540	$190	14,830	$190	17,880
Plushette	294	10,500	337	11,810	348	14,110
Ultima	920	2,120	1,010	5,020	1,230	5,020

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	$	$	$