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