Question

Question 5:                                                                                                                       10 Marks

          Tom’s Tours provides tours of scenic locations in Wilberforce, Ontario. The company expects tours taken to increase dramatically compared with the prior year. For the past year, 2018, the numbers of tours given were as follows:

First quarter              8,000

Second quarter         7,000

Third quarter           11,000

Fourth quarter           9,000

Sales for each quarter in 2019 are expected to be 30 percent higher than they were in 2018. The price per tour is $70.

Instructions:

1. Prepare a sales budget.

Answer 1

Sales Budget for the year 2019

first quarter second quarter third quarter fourth quarter

number of tours 10,400 9100 14,300 11,700

price per tour   $70 $70 $70 $70

total sales($) $7,28,000 $6,37,000 $10,01,000 $8,19,000

working note- since there is no increase in the price of the tour so it means that the number of tours must have increased in order to increase the sales.

qtr1 10,4000 (8000*130%)

qtr2 9100 (7000*130%)

qtr3 14,300(11000*130%)

qtr4 11700(9000*130%)