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Budgeting - Forecast sales using growth trend & seasonal variations

mrderek88mrderek88 Feels At HomeElgin, ScotlandRegistered Posts: 44
Hi folks

Looking for some help here - its the only part of budgeting that Im not getting my head around.

The question is:

This year's sales are £2,500,000. Analysis of recent years shows:

* growth trend of 2.5% per annum

* seasonal variations from the trend of
Q1 -£40,000
Q2 +£20,000
Q3 +£55,000
Q4 -£35,000

Forecase the sale for each quarter of next year; Q's 1,2,3 & 4

As I said, I just can't get my head around how to do this? Any help would be great - exam next week!!!




  • muppmupp New Member Registered Posts: 12

    can you check the answers first though..i sat mine 6 weeks ago so not 100% sure.

    This year’s sales is £2,500,000
    You have to apply the growth trend of 2.5% -> (£625000) -> sales forecast would therefore be £2500000+£625000= £3125000
    As they require trend per quarter, you need to divide £3125000 by 4 = £781250 per quarter. Then you just apply the variations:

    Q1 - £781250 – 40000 = £741250
    Q2 - £781250 + 20000 = £801250
    Q3 - £781250 + 55000 = £836250
    Q4 - £781250 – 35000 = £746250
  • NpsNps Experienced Mentor Registered Posts: 782
    The above is very nearly correct. You just need to change this years figures to 2,562,500 as the 2.5% increase is 62,500 not 625,000.

    After that though the above poster is correct. You divide this by 4 to get each quarters' figures and then add/subtract the variation.

    You can then double check you haven't made any mistakes by adding all the monthly figures together to check you get back to the annual figure.
  • NpsNps Experienced Mentor Registered Posts: 782
    You should get answers of
  • mrderek88mrderek88 Feels At Home Elgin, ScotlandRegistered Posts: 44
    Thanks guys - that helps a lot :)

    Should be ok now.... fingers crossed though!!

    Also, the answer's from Nps are the correct ones!!

  • muppmupp New Member Registered Posts: 12
    Oh dear, sorry about the 0s. I haven't got my budgeting result yet so if I made silly mistakes like that it's not good news!:-p

    But good luck to you Derek :-)
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