Question

Item 1Item 1 The usefulness of budgets, variances, and related analyses often depends on the accuracy of management’s estimates of future sales activity. Required 1. Identify and enter the 2016 and 2017 sales (in dollars) into a table for Apple and Google using their financial statements in Appendix A. 2. Assume that at the end of 2016 we feel Apple’s 2017 sales will increase by 5% from its 2016 sales. What is Apple’s 2017 estimated sales? 3. Assume that at the end of 2016 we feel Google’s 2017 sales will increase by 20% from its 2016 sales. What is Google’s 2017 estimated sales? 4. Using answers to parts 2 and 3, which company’s estimated 2017 sales is closer to its actual 2017 sales?

Answer 1

1. Identify and enter the 2016 and 2017 sales (in dollars) into a table for Apple and
Google using their financial statements in Appendix A.
	Sales	(Millions of US $)	(Millions of US $)
		2016	2017
	Apple	$215,639	$229,234
	Google	$90,272	$110,855
2. Assume that at the end of 2016 we feel Apple’s 2017 sales will increase by 5%
from its 2016 sales. What is Apple’s 2017 estimated sales?
		(Millions of US $)	(Millions of US $)
	Apple	2016	2017
		Actual	Estimated
	Sales	$215,639	$226,420.95
3. Assume that at the end of 2016 we feel Google’s 2017 sales will increase by 20%
from its 2016 sales. What is Google’s 2017 estimated sales?
		(Millions of US $)	(Millions of US $)
	Google	2016	2017
		Actual	Estimated
	Sales	$90,272	$108,326.40
4. Using answers to parts 2 and 3, which company’s estimated 2017 sales is closer to its
actual 2017 sales?
		(Millions of US $)	(Millions of US $)
	Apple	2017	2017	Difference
		Estimated	Actual
	Sales	$226,420.95	$229,234.00	$2,813.05
Sales of Apple was more than estimated by $2813.05 (in Millions)
		(Millions of US $)	(Millions of US $)
	Google	2017	2017	Difference
		Estimated	Actual
	Sales	$108,326.40	$110,855.00	$2,528.60
Sales of Google was more than estimated by $2528.60 (in Millions)
Google estimated sales of 2017 is closer to its actual sales