Stillwater Designs produces two subwoofers S12L7 and S12L5 T
Stillwater Designs produces two subwoofers: S12L7 and S12L5. The S12L7 sells for $660, and the S12L5 sells for $417. Projected sales (number of speakers) for the coming five quarters are as follows:
Sales Budget for Year Ended in December 31 20X1
How will Stillwater Designs use this sales budget?
1. Stillwater Designs will use the sales budget in planning as the basis for the production budget.
2. The company can also compare actual sales against the budget to see if expectations were achieved.
3. Both 1 and 2
4. None of the above
| S12L7 | S12L5 | |
| First quarter, 20X1 | 800 | 1,300 |
| Second quarter, 20X1 | 2,200 | 1,400 |
| Third quarter, 20X1 | 5,600 | 5,300 |
| Fourth quarter, 20X1 | 4,600 | 3,900 |
| First quarter, 20X2 | 900 | 1,200 |
Solution
Sales Budget for Year Ended in December 31 20X1
S12L7
1st Qtr
2nd QTR
3rd QTR
4th Qtr
Year
Units
800
2200
5600
4600
2011
Price
660
660
660
660
2011
Sales
528000
1452000
3696000
3036000
2011
S12L5
Units
1300
1400
5300
3900
2011
Price
417
417
417
417
Sales
542100
583800
2210100
1626300
Total Sales
1070100
2035800
5906100
4662300
Stillwater Designs uses this sales budget in planning as the basis for the production budget as well as used in comparing the actual sales against the budget
So both 1 and 2
| S12L7 | 1st Qtr | 2nd QTR | 3rd QTR | 4th Qtr | Year |
| Units | 800 | 2200 | 5600 | 4600 | 2011 |
| Price | 660 | 660 | 660 | 660 | 2011 |
| Sales | 528000 | 1452000 | 3696000 | 3036000 | 2011 |
| S12L5 | |||||
| Units | 1300 | 1400 | 5300 | 3900 | 2011 |
| Price | 417 | 417 | 417 | 417 | |
| Sales | 542100 | 583800 | 2210100 | 1626300 | |
| Total Sales | 1070100 | 2035800 | 5906100 | 4662300 | |


