Sunny Days 2020 Budget Report

SOUTHERN CROSS UNIVERSITY
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Sunny Days
2020 Budget Report
Date of Board
Meeting
Name of Report
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Sunny Days: 2020 Budget
Board Report
Page 2

1. Overview of Expected Results
The budget for the 12 months sales and expense has been
prepared based on the basis of estimated demands for the four
product lines of the Sunny Days. It can be observed from the budget
that, the company is having a good demand for the upcoming
months and a significant amount of profit can be earned by the
company. Though some of their product lines are having a negative
impact on the profitability of the company, but in overall
performance they are having a good mark. A 36.15% gross profit
margin can be earned by the company, if they can achieve the
projected sales and maintain their expenses within the budgeted
estimates. In terms of net profit, they can earn up to 22.5% of net
sales revenue as net income if all the operating expenses are
incurred within the budgeted estimates. Monthly total sales volume
is having a fluctuation, initially it decreases to July and thereafter
the sales volume again starts rising. The fluctuation in the sales
volume may be because of seasonal trends for their products
(Kamal 2015). The trend in their monthly sales volume can be
shown using the following bar chart.
2. Product Analysis
The Sunny Days is having four product lines the budget
analysis and income projections have been done taking only those
product lines. Each of the products are having different selling price
and each of them requires different amount of input materials and
direct labor. Comparing the selling price per unit and variable costs
per unit the contribution margin analysis can be done for each of
the products as follows.
Explanations One
piece
Board
shorts Towels
Beach
Umbrel
la
Selling price per unit $80.00 $75.00 $30.00 $35.00
Per unit variable $47.37 $35.34 $31.50 $68.44
Sunny Days: 2020 Budget
Board Report
Page 3