Question

You are assisting the management accountant with sales forecast of two brands – Y and Z – for the next three quarters of 2019. Brand Y has a steady, increasing trend in sales of 2% a quarter and Brand Z a steadily falling trend in sales of 3% a quarter. Brand Y are subject to seasonal variations as a proportion to the sales units as follows: Quarter 1 2 3 4 Seasonality -30% 0% -30% 60% Brand Z however is subject to seasonal variations in sales units as follows Quarter 1 2 3 4 Seasonality (in sales unit) -112 10 -70 172 The last four quarters unit sales are shown below: 2018 Q2 2018 Q3 2018 Q4 2019 Q1 Brand Y 331 237 552 246 Brand Z 873 593 1,314 558 Required Produce sales forecast for the remaining three quarters of 2019 for each brand.

Answer 1

Brand--Y--Taking seasonality into a/c 2019 qtr. 1 sales before seasonal variation is 246/70%*100%= 351

Brand Y
2018 Qtr.1	2018 Qtr. 2	2018 Qtr.3	2018 Qtr.4	2019 Qtr.1	2019 Qtr.2	2019 Qtr.3	2019 Qtr.4
	331	237	552	246
-30%	0%	-30%	60%	351.43	358.46	365.63	372.94	Prev*1.02
					0% Var.	365.63*(1-30%)=	372.94*1.6=
				246	358.46	255.94	596.70	Seasonal quarterly effects
				246	358	256	597	Rounded-off to

Brand--Z--Taking seasonality into a/c 2019 qtr. 1 sales before seasonal variation must have been 558+112=670

Brand Z
	873	593	1314	558
-112	10	-70	172	670	649.9	630.40	611.49	Prev.*(1-3%)
					649.9+10=	630.4-70=	611.49+172=
				558	659.9	560.40	783.49	Seasonal quarterly effects
				558	660	560	783	Rounded-off to

Answer---Produce sales forecast for the remaining three quarters of 2019

	2019 Qtr.2	2019 Qtr.3	2019 Qtr.4
Brand Y	358	256	597
Brand Z	660	560	783