Questions -
Q1. The following information is showing company peter's Ltd revenue and advertising costs over 5 years
|
1
|
2
|
3
|
4
|
5
|
|
Sales revenue
|
700
|
830
|
820
|
530
|
790
|
|
Advertising cost
|
430
|
460
|
470
|
400
|
380
|
The company's revenue for year's 6 and 7 are as follows: 960/= and 1000/=. How much is the company expected to spend on advertisement?
Q2. Peter's consulting company Ltd sell a single product. In the coming month, it is budgeted that this product will generate a total revenue of Kshs. 300000 with a contribution margin of Kshs. 125000. Fixed costs are budgeted at Kshs. 100,000 for the month. Calculate the margin of safety.
Data concerning Brian limited's single product is as follows:
Selling price 6
Variable production cost 1.2
Variable selling cost 0.4
Fixed production cost 4.00
Fixed selling cost 0.80
The budgeted production and sales for the year are 10,000 units.
Required
i. Determine the company's break even point to the nearest whole unit
ii. Using contribution margin ratio determine the sales value at breakeven point
Q3. Tina enterprises sell two products X and Y . during the year 2014, it plans to sell the following quantities of each product.
|
Products
|
Sales Budget (in units)
|
|
Quarter 1
|
Quarter 2
|
Quarter 3
|
Quarter 4
|
|
X
|
9000
|
2300
|
3000
|
8000
|
|
Y
|
8500
|
7500
|
5500
|
8500
|
Each of these two products is sold on a seasonal basis. Product A tends to sell better in summer months, while product B sells better during winter. X is sold at sh. 10 per unit while Y at a price of sh. 20 per unit throughout the year.
A study of the past experience reveals that Tina's enterprise has lost about 3% of its invoice each year because of returns( constituting 2% loss of revenue) allowances and bad debts (1 % loss).
Required - Prepare a sales budget incorporating the above information.