QUESTION 1

AT&T ltd. Manufactures two Magazines X and Y. Its sales department has three

divisions: West, South and East. Preliminary sales budgets for the year ending 31st December 2018. Based on the assessments of the divisional executives:

Product X : West 55,000 units: South 1,00,000 units and East 30,000 units

Product Y: West 65,000 units: South 82,000 units and East Nil

Sales Price X$ 3 and Y$ 2 in all areas.

Arrangements are made for the extensive advertising of product X and Y and it is estimated that West division sales will increase by 22,000 units. Arrangements are also made to advertise and distribute product Y in the Eastern area in the second half of 2003 when sales are expected to be 1,00,000 units.

Since the estimated sales of the South division represented an unsatisfactory target, it is agreed to increase both the estimates by 15 %.

Prepare sales budget for the year to 31" December 2018.