a) There are five commonly used methods for the determination of promotional budget. One of them is referred to as the percentage-of-sales method. Under this method, at times, weighted average sales for past years are used as reference for calculating the following years budget. Calculate the promotional budget for the year 2021 with the following sales scenario:

* Sales

Yr2020 $14 million

Yr2019 $16 million

Yr2018 $10 million

Yr2017 $7 million

Yr2016 $12 million

* with assigned weight at 5% a simple reduction-of-relevance per year; and;

* with 2% of weighted sales as budget

Calculation steps are required to be shown clearly in your answer without which a zero mark will still be awarded even if the correct answer is presented. Consider yourself cautioned. (5 marks)

(b) Using the same data above, should you find Yr2017s sales figure not to be reflecting that of a normal year and wish not to have it included as part of the calculation, make all adjustments necessary and re-calculate the budget using the remaining four years data. Again, calculation steps are required to be shown clearly in your answer without which a zero mark will still be awarded even if the correct answer is presented. Consider yourself cautioned. (3 marks)

For (c)/(d) The break-even formula is:

Breakeven Volume (In Units) = (Total Fixed Costs) / (Unit Selling Price Unit Variable Cost)

What would be the (c) break-even volume in units (2 marks) and (d) break-even sales in dollars (2 marks) if a firm set a unit selling price of $600 when total fixed costs is $1,000,000 and variable cost per unit is $400? Calculation steps are required to be shown clearly in your answer without which a zero mark will still be awarded even if the correct answer is presented. Consider yourself cautioned.

For (e)/(f) Should a profit of $600,000 be made, (e) how would the above formula be modified Present your answer as a complete formula. (1 mark), and, (f) using the numbers above, how many units would you need to sell to make such a profit? (2 marks) Calculation steps are required to be shown clearly in your answer without which a zero mark will still be awarded even if the correct answer is presented. Consider yourself cautioned.