Dec 2016

The actual sales for quarter 1 were 14096. The had budgeted on sales of 13425 and therefore the actual sales were 5% higher than budget and the question says this was due to higher prices. So the budget for each of the remaining 3 quarters needs to be increased by 5% also. The original budget figures are increasing by 2% each quarter, and so when budgeting for Q1 of next year, we need to take the new budget figure for Q4 of this year and increase it by 2%. When you know the new revenue figures, the distribution costs will be the same % as at present (as per the question) which is 5%. The question tells you that the actual admin costs were 2020 in Q1 and that they will remain fixed!!