I. According to Function 
I. Sales Budget
Sales budget is the basis for the preparation of other budgets. It is the forecast of sales to be achieved in a budget period. The sales manager is directly responsible for the preparation of this budget. The following factors are taken into consideration:
a. Past sales figures and trend
b. Salesmen’s estimates
c. Plant capacity
d. General trade position
e. Orders in hand
f. Proposed expansion
g. Seasonal fluctuations
h. Market demand
i. Availability of raw materials and other supplies
j. Financial position
k. Nature of competition
l. Cost of distribution
m. Government controls and regulations
n. Political situation.

Example Problems:
1. The Royal Industries has prepared its annual sales forecast, expecting to achieve sales of Rs. 30, 00,000 next year. The Controller is uncertain about the pattern of sales to be expected by month and asks you to prepare a monthly budget of sales. The following is the sales data pertained to the year, which is considered to be representative of a normal year:
Month
Sales (Rs.)
Month
Sales (Rs.)
January
1,10,000
July
2,60,000
February
1,15,000
August
3,30,000
March
1,00,000
September
3,40,000
April
1,40,000
October
3,50,000
May
1,80,000
November
2,00,000
June
2,25,000
December
1,50,000
Prepare a monthly sales budget for the coming year on the basis of the above data.
Solution:

2. Malar ltd sells two products A and B which are produced in its special division for the year 2010 were planned as follows:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Product A
10,000
12,000
13,000
15,000
Product B
5,000
4,500
4,000
3,800

The seller prices were Rs. 20 per unit and Rs. 50 per unit respectively for A and B. Average sales returns are 5% of sales and the discounts & bad debts amount to 4% of the total sales.
Prepare sales Budget for the year 2010.

Solution: