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Unit 9: Budgetary Control
2. Sankaran Bros sell two products A and B, which are manufactured in one plant. During the Notes
year 2008, the firm plans to sell the following quantities of each product.
Product April-June July-September October- December January-March
Product A 90,000 2,50,000 3,00,000 80,000
Product B 80,000 75,000 60,000 90,000
Each of these two products is sold on a seasonal basis Sankaran Bros, plan to sell product
A through out the year at price of 10 a unit and product B at a price of 20 per unit.
A study of the past experiences reveals that Sankaran bros has lost about 3% of its billed
revenue each year because of returns (constituting 2% of loss if revenue allowances and
bad debts 1% loss).
Prepare a sales budget incorporating the above information.
3. Gopi & Co. Ltd. produces two products, Alpha and Beta. There are two sales divisions viz.
North and South. Budgeted sales of the year ended 31st December 2008 were as follows.
Division Products Units Price per unit ( )
North Alpha 25,000 10
Beta 15,000 5
South Alpha 24,000 10
Beta 30,000 5
Actual sales for the period were
Product North South
Alpha 28,000 units @ 10 each 25,000 units @ 10 each
Beta 18,000 units @ 5 each 33,000 units @ 5 each
On the basis of assessments of the salesmen the following are the observations of sales
division for the year ending 31st December 2009:
North Alpha budgeted increase of 40% on 2008 budget
Beta budgeted increase of 10% on 2008 budget
South Alpha budgeted increase of 12% on 2008 budget
Beta budgeted increase of 15% on 2008 budget
It was further decided that because of the increased sales campaign in North an additional
sales of 5,000 units of product will result.
Prepare the sales budget for 2009 (a) zonewise (b) productwise.
4. From the following information prepare a cash budget for the months of June and July.
Month Credit sales Credit purchase Manufacturing Selling overheads
( ) ( ) overheads ( ) ( )
April 80,000 60,000 2,000 3,000
May 84,000 64,000 2,400 2,800
June 90,000 66,000 2,600 2,800
July 84,000 64,000 2,000 2,600
LOVELY PROFESSIONAL UNIVERSITY 205
