The Simpson Corporation has gathered information regarding past sales of custom t-shirts. Year Sales 2013 $225,000 2014 $193,000 2015 $248,000 2016 $360,000 2017 $340,000 2018 $295,000 2019 $310,000
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The Simpson Corporation has gathered information regarding past sales of custom t-shirts.
| Year | Sales |
|---|---|
| 2013 | $225,000 |
| 2014 | $193,000 |
| 2015 | $248,000 |
| 2016 | $360,000 |
| 2017 | $340,000 |
| 2018 | $295,000 |
| 2019 | $310,000 |
- Predict the sales for 2020 using the moving average method.
- You noticed a sudden jump in sales for 2016. After inquiring about this jump, you were notified by your manager about a one-time special order sale for $60,000 in that year that is not likely to be repeated. What revision, if any, would you make in the sales information used for projection?
- If you revised your historical sales to be used to project 2020 sales, please recalculate your projection using the moving average method.
- Which projection (Question 1 or Question 3) do you feel is more representative of the Simpson Corporation's historical sales? Why?
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what are the formulas used to get the predictions for 2020
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