The Black Helmet Motor Cycle Company wholesales Motor Cycles. They have two models available being the Roadster and the Trailer. They have offices in each state of Australia and a Management team including representatives from Sales, Marketing, Purchasing, Warehousing, Human Resources, IT, Administration and Finance Divisions. In October 20x3 the Finance Group commenced their budget compilation activities relating to 20x4. The following information relating to Sales Revenue for 20x3 has been produced by the Hot Motor Cycles Research Agency. Extract from the Report from the Hot Motor Cycles Research Agency 1. Forecast Information for 20x3 a. The forecast of Total Sales for the Australian Market in 20x3 is as follows: b. On Road Bike (similar to the Roadster) - 20,000 cycles c. Off Road Bike (similar to the Trailer) - 30,000 cycles d. The Market Share of the Roadster & Trailer is expected to remain at 10% and 15% respectively. e. The Average Wholesale Price of the Roadster & Trailer Bikes is $5,000 & $3,500 respectively. f. Whilst 20x3 has not ended it is expected that sales for both products will be as follows - 20% of Black Helmet's total sales achieved in the first Quarter ended 31 March 20x3, 30% in the next Quarter ended 30 June 20x3, 30% in the Quarter ended 31 September 20x3 followed by 20% for December 20x3. 2. Budget assumptions – 20x4 The Market Research Agency has provided the following information to assist in preparing the budget for 20x4- a. Economic data and analysis suggests the Total Australian Market for 20x4 is expected to increase in volume for the On Road Bikes by 10% compared to 20x3. The Market for the Off Road Bike is expected to be stable. b. Black Helmet's share of the On Road segment is expecting to remain stable at 10% whilst a strong market share for the Off Road bike is expected due to product enhancements with a lift to 20% of the total expected market in volume. c. The above volumes will be achieved with prices of $5,200 for the Roadster and $3,700 for the Trailer. d. It is anticipated that Quarterly sales revenue for both products will fluctuate from the current year. For the first quarter of 20x4 sales volume is expected to be 15% of total sales for calendar year 2014. 20% of sales are expected to be derived in the second quarter ending 30 June 20x4. An improvement to the company's products should see a market reaction where the September quarter should be 35% of total sales followed by 30% of the total for the last Quarter being period ending 31 December 20x4. Required: Part A 1. From the above information you are required to prepare a Sales Forecast for each Quarter of 20x3 and a Budget for each Quarter for the 20x4 year. This should show Sales Units and Total Revenue for each product. 2. Complete the Comparative Statement to be presented to Management showing Total Forecast Sales Revenue for 20x3, the Proposed Budget for 20x4 and the Variance in Units & Revenue in both dollar and percentage terms (The percentage should be set to 1 decimal point when formatting your cells) Complete the Excel template supplied. The use of formulas by creating a data range to the right of the spreadsheet would be useful for this task. Part B 1. As the Sales Manager you are required to prepare a Report to Senior Management. This report should outline the assumptions made and expected outcomes relating to the 20X4 budget as compared to the same period in 20X3. They have specifically asked you to comment on the key factors you have considered in creating the Sales Revenue Budget and provide a brief explanation of each one. 2. Who are the major internal and external stakeholders you have considered in preparing the budget? What interest do they have in the development of the budgets for the company? 3. "The Development of Budgets will often involve the collaboration of team members and negotiating with management and other stakeholders". As Sales Manager what approach would you take to developing the budget with your team? What are the critical factors to consider when undertaking this process? Use your WORD (or similar) document Task 2 – Operational Budgets