Fling Company has budgeted the following unit sales for 4 months in 2016: 15,000

Question

Fling Company has budgeted the following unit sales for 4 months in 2016: 15,000 17,000 22,000 25,000 April May June July Of the units budgeted, 35% are sold in the Western Region at an average price of $80 per unit, and the remainder are sold by the Eastern Region at an average price of $85 per unit. Fling has only one salesman in each region. Required: a. Prepare a sales budget with columns for each region and for the company in total b. Sales representatives are compensated as follows: for the month of June. Monthly base salary: 0 to 6,000 units: 6,001 to 15,000 units: 15,001 to 25,000 units: Over 25,001 units: All sales compensation is paid in cash in the month earned. Based on this information, calculate the amount Fling expects to pay in sales compensation for the month of April. $750 3% of selling price 6% of selling price 12% of selling price 15% of selling price

Explanation / Answer

Req a; Sales budget for the month of June: Western Eastern Expected sales unit 7700 14300 Selling price 80 85 Budgeted sales in $ 616000 1215500 Req b: Sales compensation: Western Eastern Total Basic salary 750 750 1500 Commsion Western (5250*80*3%) 12600 Eastern (6000*85*3%+3750*85*6%) 34425 47025 Total compensation 13350 35175 48525

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