Aspen Ski Shop specializes in selling ski boots and maintains sales that are extremely seasonal. For the year 2017, Aspen is trying to decide whether to establish a sales budget based on average sales or on sales estimated by quarter. The unit sales for 2017 are expected to be 20 percent lower than 2016 sales. Unit sales by quarter for 2016 are as follows:
Men's ski boots sell for $175, women's sell for $170, and children's sell for $115.
Required: Assuming a 20 percent decrease in sales, prepare a sales budget for each quarter of 2017 using:
a. Average quarterly sales
b. Actual quarterly sales
c. Identify the advantage of using each method.

Question

Aspen Ski Shop specializes in selling ski boots and maintains sales that are extremely seasonal. For the year 2017, Aspen is trying to decide whether to establish a sales budget based on average sales or on sales estimated by quarter. The unit sales for 2017 are expected to be 20 percent lower than 2016 sales. Unit sales by quarter for 2016 are as follows:
  Men's ski boots sell for $175, women's sell for $170, and children's sell for $115.
Required: Assuming a 20 percent decrease in sales, prepare a sales budget for each quarter of 2017 using:
a. Average quarterly sales
b. Actual quarterly sales
c. Identify the advantage of using each method.

Quizplus · Accepted Answer

The Answer of Aspen Ski Shop specializes in selling ski boots and maintains sales that are extremely seasonal. For the year 2017, Aspen is trying to decide whether to establish a sales budget based on average sales or on sales estimated by quarter. The unit sales for 2017 are expected to be 20 percent lower than 2016 sales. Unit sales by quarter for 2016 are as follows:
  Men's ski boots sell for $175, women's sell for $170, and children's sell for $115.
Required: Assuming a 20 percent decrease in sales, prepare a sales budget for each quarter of 2017 using:
a. Average quarterly sales
b. Actual quarterly sales
c. Identify the advantage of using each method.

Aspen Ski Shop Specializes in Selling Ski Boots and Maintains