【正文】 s sales are $75,000, the annual run rate ($75,000 multiplied by 12 months) is $900,000. Annual data may be most appropriate for forecasting。187。 Planned changes in sales and promotion activities171。 Price sensitivity of purchasers Competitive products that have or may be introduced in the market The history of sales growth for your pany39。187。 Spencer.171。s Senior Vice President, Sales and Marketing. In 1989 he moved up to bee Deputy Chairman of Hilton UK, and Executive Vice President, Hilton International.He joined Stakis as Chief Executive in 1991. Eight years later the pany was acquired by Hilton Group for around 163。 Leisure Division in 1983, followed by Managing Director of Ladbroke Hotels in 1985.He spent 15 years with Grand Metropolitan, mainly in sales and marketing, which culminated in a Board position as Worldwide Marketing Director.Following Ladbroke Group39。s just natural human emotion. Be aware that any forecast for the future will be optimistic。 time? most people will say: yes。m going to do much worse in five years than I am now. Can I have a raise? So, it39。t wonderful now so the graph es down a bit. Then for the next four years it goes up, and the ending is always Y percentage higher than the beginning. First, one needs to understand why people do that. You39。s in betting hotels, holiday camps, bingo or machine sales—ever bringing me a fiveyear forecast (which is what most people ask for) where business wasn39。ve been in, and ever since I39。Personal InsightsBeware of optimistic forecastsSee AlsoTips for setting assumptionsBudget preparation checklistPreparing an Operating Budget—Goals and AssumptionsSetting assumptionsBeware of optimistic forecastsPersonal InsightOne of the strangest things that I39。 Previous |NextSetting assumptionsUnless we find some way to keep our sights on tomorrow, we cannot expect to be in touch with today. —Dean RuskAll budgeting requires making assumptions about the future. In many panies senior management will municate key assumptions that are to be used throughout the organization—such as a 5% increase in salaries, or a 10% increase in sales volumes. In other cases the assumptions are specific to an individual department39。 Previous |Nexts tactical goals include: 1. What technological changes are affecting the industry?2. How can current processes be improved?3. What longerterm initiatives need to be considered in order to position the pany for the future?Achieving these goals requires choosing tactics that may in turn affect the budget. Examples of Goals, Options, and Budget ImpactsGoalOptionsBudget ImpactsBee the most reliable provider of Internet servicesMaintain stateoftheart equipmentRequires capital investmentTrain the most skilled repair teams in the fieldHigher labor and training costsProvide the most timely customer serviceIncreased spending on customer supportIncrease revenues by 10%Raise pricesLower sales volume, higher gross marginExpand marketingIncreased sales, higher marketing costs, increased production costsEnter into partnerships Increased revenues, higher production costs, higher selling costss larger strategic priorities and the department or business unit39。187。t decide to develop its own ABC or ABB system. But when the circumstances are right, activitybased approaches to understanding the economic dynamics of an organization provide longterm planning benefits.171。 More precise allocation of costs to staff responsibilitiesThe disadvantage of this approach is that it can be costly and plex to establish, so that it may not be worth the trouble for a small pany with few products or services. It also has to be adopted by and embedded into the whole organization。 Improved accuracy in identifying resource needsActivitybased budgeting (ABB)Organizations that use ABC to allocate overhead and other costs to individual departments may also adopt activitybased budgeting (ABB). Activitybased budgeting starts with forecasting the planned sales volume for each product. Historical data from the activitybased costing system is then used to estimate the required activities to produce that volume, the resources required to support those activities, and the cost of those resources.The primary advantage of activitybased budgets is that costs can be more accurately associated with activities, making the planning process more precise and corrections more effective. Companies using this approach report benefits including: Previous |Next187。s fixed costs are 50 and its variable costs are 0. Variable costs steadily increase at per unit. Fixed costs remain at 50 until 300 units, at which point they jump to 100. They remain at 100 until 600 units, at which point they jump to 150. They remain at 150 until 900 units, at which point they jump to 200. This trend continues for all available data. CalcuTech leases two fabrication machines, each of which produces 300 calculators. Increased demand leads Sophie to increase production of the MathTech calculator from 500 units to 800 units. After the increase, what happens to the fixed cost, and what is a possible reason for this?The fixed costs increase, because Sophie will have to pay more for raw materials.Not the best choice. While the fixed costs will increase, raw materials are a variable cost that directly correlates to production rates.The fixed costs stayed the same, because these costs do not change for any variation in production.Not the best choice. Fixed costs stay the same over a wide range of production volume. In this case, the cost for leasing fabrication machines would stay the same whether Sophie was producing 300 units or 600 units. But even fixed costs can increase when drastic change occurs.The fixed costs increase because Sophie has to lease an additional fabrication machine to meet the new demand.Correct choice. Sophie will need to lease another fabrication machine to