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       The sales budget normally indicates for each product, 1) the quantity of estimated sales and 2) the expected unit selling price. This information is frequently reported by region or by sales representatives.
    In estimating the amount of sales for each product, past sales volumes are often used as a starting point. These amounts are revised for factors that are expected to affect future sales, such as the factors listed below:

          - Backlog of unfilled sales orders
          - Planned advertising and promotion
          - Expected industry and general economic conditions
          - Productive Capacity
          - Projected pricing policy
          - Findings of market research studies

        Once an estimate of the sales volume is obtained, the expected sales revenue can be determined by multiplying the volume by the expected unit sales price. The example below shows the budget sales for the company Colt Manufacturing, Inc.

    Colt Manufacturing, Inc.
    Sales Budget
    For the Year Ending December 31, 2008
    Product and Region
    Unit Sales Volume
    Unit Selling Price
    Total Sales
    Wallet:


        East
    287,000
    $12.00
    $3,444,000
        West
    241,000
    12.00
    2,892,000
      Total
    528,000

    $6,336,000
    Handbag:


        East
    156,400
    $25.00
    $3,910,000
        West
    123,600
    25.00
    3,090,000
       Total
    280,000

    $7,000,000
    Total revenue from sales

    $13,336,000

       For control purposes, management can compare actual sales and budgeted sales by product, region or sales representative. Management would investigate any significant differences and take possible corrective actions.

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