Simple Accounting Calculation. Forecast

PLease see attached.

The problem posed here, taken from experiences in textbook sales, is typical of how salespeople in all industries are expected to allocate their time to their accounts. As described in this lesson, your territory’s quota has been established in a manner that is (

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) objective, (2) measurable, (3) replicable, and (4) attainable. Now, you have returned to your home/office with instructions to complete an itinerary for your territory for the coming year. The following steps will help you do so and answer Questions 1-2, below.

Step 1: Compute the dollar volume you are expected to bring in for 2008, using this formula:

Total

2007

Sales + (Total 2007 Sales X Percent Increase) = 2008 Sales Goal (Quota)

Next, determine how much each account has contributed historically to your territory’s performance:

Step 2: Calculate each account’s total contribution to your territory over the past three years, weighted to favor the most recent year:

Account

2005

Sales + Account

2006

Sales + (2 X Account 2007 Sales) = Historic Account Sales

Step 3: Do the same for your territory as a whole using this formula:

Total 2005 Sales + Total 2006 Sales + (2 X Total 2007 Sales) = Historic Territory Sales

Step 4: Calculate the percent of your territory’s total results that each account produced historically over the past three years using this formula:

Historic Account Sales / Historic Territory Sales = Percent Account Contributed

Round your percentages to the nearest one tenth. In other words, 10.8743 should be rounded to 10.9%, not to 10.87% and not to 11%.

Step 5: Determine the revenue you should expect in 2008, by individual account, using this formula:

Territory 2008 Sales Goal X Percent Account Contributed = 2008 Forecast Sales

Express your answers in whole dollars; no cents, please. To check your work, add your individual account 2008 Forecast Sales, which should equal your Territory 2008 Sales Goal (quota), your answer to Question 1. NOTE: In practice, depending on the precision of your sales manager, the sum of your individual account goals should equal your 2008 Sales Goal (quota). In correcting this assignment, I will allow a plus-or-minus one percent (1%) margin of error in your individual account calculations.

Step 6: Use the “Percent Account Contributed” to calculate how many of the 180 days in a typical school year you should spend at each account. Round off to whole days.

Name:

Date:

Makeup of Territory A

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

ACCOUNT	2005	2006	2007	2008 Forecast Sales	Days Allocated
College of Olympia	116,030	176,970	169,400
Anaheim College	15,190	1,250	5,004
Cricklewood College	67,890	164,170	83,310
Midwest College of Bus.	65,980	45,280	98,220
St. Jude’s College	68,070	55,880	124,550
Woodrow Wilson Univ.	82,390	100,050	157,790
Mt. Shasta College	27,630	79,231	84,900
Coast State College	258,450	219,390	274,660
Southwest N. M. Comm. College	52,890	46,570	55,570
Camden Technical College	158,590	209,690	162,440
Bozeman College	101,200	148,500	138,530
Cape Girardo State Univ.	111,880	85,060	76,800

1.
Your territory above has been assigned an overall increase of 11% for 2008. What is your sales goal (quota) for 2008?

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2.
With your territory assigned an overall increase of 11% for 2008, use the formula outlined in your instructions to answer these questions:

A. What are the forecast 2008 sales for each account (school) in your territory?

FILL IN THE “2008 FORECAST SALES” COLUMN IN ABOVE TABLE.

B. Of the 180 days schools are in session, how many days does the formula dictate you spend at each campus?

FILL IN THE “DAYS ALLOCATED” COLUMN IN ABOVE TABLE.

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