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Question: 15. The general sales manager at Knox Products Corporation has just received next year’s sales forecast (in units) for two of the firm’s major products (Less Knox and More Knox) from sales managers of the Eastern and Western sales regions: Eastern Region Forecast Less Knox More Knox 150 300 Western Region Forecast Less Knox More Knox 300 450 Less Knox sells for $4.50 per unit and More Knox sells for $8.50 per unit. a. The corporate economist has forecast a total corporation-wide sales volume for these two products of $11,000 for next year. What is the disparity between the two forecasts at the item level? b. If top management agrees to a total corporation-wide sales forecast volume of $9,000, what is the sales forecast at the item level? –Free Chegg Question Answer

Transcribed text From Image: 15. The general sales manager at Knox Products Corporation has just received next year's sales forecast (in units) for two of the firm's major products (Less Knox and More Knox) from sales managers of the Eastern and Western sales regions: Eastern Region Forecast Less Knox More Knox 150 300 Western Region Forecast Less Knox More Knox 300 450 Less Knox sells for $4.50 per unit and More Knox sells for $8.50 per unit. a. The corporate economist has forecast a total corporation-wide sales volume for these two products of $11,000 for next year. What is the disparity between the two forecasts at the item level? b. If top management agrees to a total corporation-wide sales forecast volume of $9,000, what is the sales forecast at the item level?

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Ans.step: 1 of 3

The firm’s two major products are less Knox and more Knox is as below:

• The next year sales forecast of Less Knox and More Knox at eastern region is 150 and 300 respectively; western region are 300 and 450 respectively.

• The selling price of Less Knox is $4.50 and More Knox is $8.50

step: 2 of 3

The sales volume of these two products based on the forecast at all regions

Less Knox = 150x300x$4.50 = 2,025 More Knox = 300x450 $8.50 = 6,375 Total = $2,025+$6,375 = $8,400

(a)

According to the economist’s estimation, the sales volume for two products is $11,000. The sales volume based on sales forecast at item level is $8,400.

The disparities between the two forecasts are

Hence, the disparity between the two forecasts is

step: 3 of 3

(b)

In the earlier sales volume of $8,400, Less Knox sales volume is 25% and More Knox sales volume if 75%.

Similarly, consider the management agreed sales forecast volume i.e. $9000.

Now calculate,

25% of $9,000 i.e. 2250 is the sales volume of Less Knox

75% of $9,000 i.e. 6750 is the sales volume of More Knox.

Sales forecast at iteLess Knox 2,250 $4.50 = 500m level is as follows:

Therefore, the new sales forecast of two products is andrespectively.


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