Whiz Calculator CompanyWHY SALES BUDGET???The sales budget is the most important budget while it constitutes the overall budget of the organization for a particular fiscal year. It is important in the sense that how would someone make a fiscal budget for the organization if they don't know how much to sell or what the sale of the organization would be? If you knew the sales volume or units of product you want to sell in a particular fiscal year, then you will make production budget accordingly and similarly purchase raw materials and hire labor to meet the requirements. So if you don't know how much you want to sell, how would you budget other things and how would you compare your performance at the end of the fiscal year ???Introduction:-Whiz Calculator Company is currently evaluating the new method of planning and controlling sales costs. The old method was unsatisfactory according to Mr. Reisman. Under the old method, sales expenses were budgeted on a fixed or appropriation basis. Every October, the accounting department sent reports of actual expenses for the previous year and for the current year to branch managers and other managers responsible for the sales departments. By examining the previous year's report and according to their judgment, these department heads prepared and presented estimates of their departments' expenses for the following year. Subsequently, the quotes made by the branch managers were sent to the sales manager, who was responsible for all branch sales. He established whether they were reasonable or not and clarified any doubtful points by correspondence. After approval by the sales manager, the branch expense estimates were submitted to the marketing manager (Paula Melmad), who was responsible for all sales, promotional and warehouse activities. Then the marketing manager discussed these numbers with the concerned managers and, after reconciling the differences, the estimates from all sales departments were combined into the sales expense budget. Finally the budget was presented to the budget committee for final approval. These Budgeted figures were divided into 12 equal amounts and compared with the actual results for each month. (Pg no. 171) From the new president's point of view there were two limitations of the old method. First, there was no 100% confidence in the reasonableness of the estimates made by department heads. Secondly, the conditions of sale changed substantially after the adoption of the budget, however with the old method it was impossible to change the budgeted expenses for these changes.