SCENARIO 1 You are the financial accountant for Wear n Pair , a retail shop that manufactures
Question:
SCENARIO 1
You are the financial accountant for Wear ‘n Pair, a retail shop that manufactures and sells ready-to-wear clothing. The shop is known for selling a fashionable winter coat for ladies called the Snowflake. The Snowflake sells all year, however, the demand increases during the winter season (June to August), and declines during summer (December to February).
Vaine Maher, the business owner, asks you to prepare the operational budget for the next financial year. Consider the following:
- Based on the actual monthly winter sales for this year, a projected sales increase of 15 per cent is expected for the next winter sale.
- A uniform projected sales increase of 10 per cent monthly sales is expected for the rest of the year.
- The management aims to have an additional markup of 5% on the current unit selling price for each month to increase revenue.
- The beginning monthly inventory for the upcoming year must be increased by 15% to meet expected sales assuming that the expected sales for June are achieved.
Complete the series of tasks that follow to prepare the operational budget for Wear ‘n Pair. Access Wear ‘n Pair’s organisational procedures from this link:
Wear 'n Pair Budget and Forecasts Policy
For the purpose of this assessment, the date today is 1 June 20xx, the last month of the quarter and the first month of the winter sale.
20xx represents the current year, while 20xx + 1 is the succeeding financial year.
Sales Budget
Refer to the sales budget data for the current year in the following file: Wear ‘n Pair Operational Budget for 20xx (username: newusername password: newpassword) Create the sales budget for the next financial year based on the sales forecast and project objectives for Snowflakes. Your sales budget must include the following:Expected monthly unit sales Unit selling price per month Expected monthly subtotal Quarter total cost and the annual total sales Record your responses in ‘Sales Budget for Year 20xx+1’ portion of the following template: WP Budget for 20xx+1 Template (username: newusername password: newpassword) Ensure that your budget is broken down into seasonal periods to determine the winter and summer sale seasons, and the regular months.Responses to the unit sales must be rounded off to the nearest unit. All amounts must be rounded off to the nearest dollar (except for the unit selling price). The completed template is to be submitted at the end of Task 5. Production Budget
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Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin