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Hi ,
For the above question it says Charminster Coaches can sell a maximum of 300 places on coastal holidays each week, 52 weeks a year. Coaches are budgeted to be 70% full over the year as a whole, although this figure drops to 40% for the three winter months.
I have seen the model answer the sales units is 300*52*.7=10920,
they correctly cared about the 70% possibility of the full holidays
but for me I saw the 40% of the same effect on the three winter months
So why they cared about the 70% and not on the 40% possibility of the reduced sales in the three months of winter
Because that will reduce the sales further and hence the budgeted sales and the Margin of safety,
So the 70% for 9 months
and 40% for 3 months of winterI am confused with that,
Sometimes the wording of the question is tricky.
Thanks,
The calculation for the annual sales units for Charminster Coaches of 300 places per week times 52 weeks in a year, multiplied by the budgeted occupancy rate of 70%. This results in:
300 places/week * 52 weeks/year * 70% occupancy = 10,920 sales units/year.
This figure represents the expected number of places sold over the year, taking into account the average occupancy rate. It does not account for the seasonal variation mentioned, where occupancy drops to 40% during the winter months, as the calculation provided is for the annual average.
Hi
So in the calculation of any sales units we should not consider the seasonal variations ,or
here only it is not required ???
Thanks,
Because it says
Using the current annual budgeted figs calculate the be no of holiday placesThey can sell a max of 300 each week, for 52 week’s ,budget to be 70% full “over the year”
I suggest because you are asking quite a few questions that you need to go back and watch out free lectures before attempting mocks
As many as you can
Chapter 5, 7, 8 & 11 based upon what you have asked so far
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