When you return to Jones Surf Shop they are starting to put a budget together for the next year. Help Jere
budgeting process.
Jeremy would like to grow the business next year. He is budgeting in hopes that he will grow sales of surfboards by 2
complete the sales budget below
Jones Surf Shop
Sales Budget
Quarter 1 Quarter 2 Quarter 3
Expected Sales Units 150 175 200
Sales Price per Unit $ 250 $ 250 $ 250
Total Sales Revenue $ 37,500 $ 43,750 $ 50,000
Based on the above sales projections we need to put together a purchases budget. Jeremy would like to keep 50 bo
of the boards is $100 from the wholesaler.
Jones Surf Shop
Purchases Budget
Quarter 1 Quarter 2 Quarter 3
Goods Sold (Units) 150 175 200
+ Ending Inventory (Units) 50 50 50
Goods Available for Sale 200 225 250
Beginning Inventory 50 50 50
Units to be Purchased 150 175 200
Cost per Unit $ 100 $ 100 $ 100
Total Purchases Cost $ 15,000 $ 17,500 $ 20,000
The following is a list of expenses that need to go into the selling and administrative expense budget. Help Jeremy s
Administraitve Expense Budget
Costs per quarter:
A Sales Commission (per Unit sold) $20
B Sales Salaries (10% Raise expected in Q3) $ 3,500
C Management Salaries $ 1,500
D Marketing Expense $ 750
E Insurance $ 1,200
F Rent $ 1,500
, Jones Surf Shop
Sales & Administrative Expense Budget
Quarter 1 Quarter 2 Quarter 3
Budget Sales in Units 150 175 200
Variable Expenses
Sales Commissions $ 3,000 $ 3,500 $ 4,000
Total Variable Expense $ 3,000 $ 3,500 $ 4,000
Fixed Expenses
Sales Salaries $ 3,500 $ 3,500 $ 3,850
Management Salaries $ 1,500 $ 1,500 $ 1,500
Marketing Expenses $ 750 $ 750 $ 750
Insurance Expense $ 1,200 $ 1,200 $ 1,200
Rent Expense $ 1,500 $ 1,500 $ 1,500
Total Fixed Expenses $ 8,450 $ 8,450 $ 8,800
Total Selling &
Administrative Expenses $ 11,450 $ 11,950 $ 12,800
Jeremy has an interest expense of $2000 per quarter that needs to be accounted for. The income tax rate is 10% on
depreciation is $667
Jones Surf Shop
Budgeted Income Statement
Quarter 1 Quarter 2 Quarter 3
Sales (In Dollars - $250 per
unit) $ 37,500 $ 43,750 $ 50,000
Cost of Goods Sold (In
Dollars - $100 per unit) $ 15,000 $ 17,500 $ 20,000
Gross Profit $ 22,500 $ 26,250 $ 30,000
Sales & Adminstrative
Expenses $ 13,950 $ 14,450 $ 15,800
Earnings before Interest,
Taxes & Depreciation
(EBITDA) $ 8,550 $ 11,800 $ 14,200
Interest Expense $ 2,000 $ 2,000 $ 2,000
Income Tax (10%) $ 655 $ 980 $ 1,220
Depreciation $ 667 $ 667 $ 667
Net Income $ 5,228 $ 8,153 $ 10,313
budgeting process.
Jeremy would like to grow the business next year. He is budgeting in hopes that he will grow sales of surfboards by 2
complete the sales budget below
Jones Surf Shop
Sales Budget
Quarter 1 Quarter 2 Quarter 3
Expected Sales Units 150 175 200
Sales Price per Unit $ 250 $ 250 $ 250
Total Sales Revenue $ 37,500 $ 43,750 $ 50,000
Based on the above sales projections we need to put together a purchases budget. Jeremy would like to keep 50 bo
of the boards is $100 from the wholesaler.
Jones Surf Shop
Purchases Budget
Quarter 1 Quarter 2 Quarter 3
Goods Sold (Units) 150 175 200
+ Ending Inventory (Units) 50 50 50
Goods Available for Sale 200 225 250
Beginning Inventory 50 50 50
Units to be Purchased 150 175 200
Cost per Unit $ 100 $ 100 $ 100
Total Purchases Cost $ 15,000 $ 17,500 $ 20,000
The following is a list of expenses that need to go into the selling and administrative expense budget. Help Jeremy s
Administraitve Expense Budget
Costs per quarter:
A Sales Commission (per Unit sold) $20
B Sales Salaries (10% Raise expected in Q3) $ 3,500
C Management Salaries $ 1,500
D Marketing Expense $ 750
E Insurance $ 1,200
F Rent $ 1,500
, Jones Surf Shop
Sales & Administrative Expense Budget
Quarter 1 Quarter 2 Quarter 3
Budget Sales in Units 150 175 200
Variable Expenses
Sales Commissions $ 3,000 $ 3,500 $ 4,000
Total Variable Expense $ 3,000 $ 3,500 $ 4,000
Fixed Expenses
Sales Salaries $ 3,500 $ 3,500 $ 3,850
Management Salaries $ 1,500 $ 1,500 $ 1,500
Marketing Expenses $ 750 $ 750 $ 750
Insurance Expense $ 1,200 $ 1,200 $ 1,200
Rent Expense $ 1,500 $ 1,500 $ 1,500
Total Fixed Expenses $ 8,450 $ 8,450 $ 8,800
Total Selling &
Administrative Expenses $ 11,450 $ 11,950 $ 12,800
Jeremy has an interest expense of $2000 per quarter that needs to be accounted for. The income tax rate is 10% on
depreciation is $667
Jones Surf Shop
Budgeted Income Statement
Quarter 1 Quarter 2 Quarter 3
Sales (In Dollars - $250 per
unit) $ 37,500 $ 43,750 $ 50,000
Cost of Goods Sold (In
Dollars - $100 per unit) $ 15,000 $ 17,500 $ 20,000
Gross Profit $ 22,500 $ 26,250 $ 30,000
Sales & Adminstrative
Expenses $ 13,950 $ 14,450 $ 15,800
Earnings before Interest,
Taxes & Depreciation
(EBITDA) $ 8,550 $ 11,800 $ 14,200
Interest Expense $ 2,000 $ 2,000 $ 2,000
Income Tax (10%) $ 655 $ 980 $ 1,220
Depreciation $ 667 $ 667 $ 667
Net Income $ 5,228 $ 8,153 $ 10,313
