Prepare a sales budget
Forecast units and selling prices by product and period, then calculate budgeted sales revenue.
Section 4.3 · Budgeting and budgetary control
Cambridge International AS & A Level Accounting 9706, 2026–2028 syllabus, Version 2. Topic 4.3 covers budgetary control, linked master-budget schedules, spreadsheets, limiting factors, flexible budgets, reconciliations, behavioural effects and supported decisions. Practice is self-checked, not an official Cambridge grade. Full timed Papers 1–4 and human subject-teacher review remain outstanding.
Before you begin
- Use AS Topics 2.1–2.2 for cost behaviour, contribution and budgeting foundations. For each schedule, label the period, units, price, inventory policy, timing assumptions and opening balance before calculating.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
If 1,000 units sell at $12 each, what is revenue?
What you will learn
- Calculate sales revenue by product
- Organise a multi-period sales schedule
- Qualify a forecast using demand evidence
Build from quantity and price
A sales budget usually lists expected sales quantity and selling price for each product and period. Budgeted sales revenue = budgeted units sold × budgeted selling price per unit. Keep units and currency in the same period and show products separately before totaling.
The quantity forecast may use past sales, orders, market research, capacity, seasonality, prices and expected competition. State relevant assumptions; a forecast is a planning estimate, not a promise that customers will buy the planned number.
Link sales to the next schedules
Sales quantity is a key input to production or purchases. The revenue schedule also feeds the budgeted statement of profit or loss, while collection timing feeds the trade receivables and cash budgets.
A price promotion can change both price per unit and quantity sold. Prepare the revenue calculation using the revised assumptions and consider whether extra selling costs or capacity limits affect the decision.
Pause and explain
A product has budget sales of 750 units at $48. What revenue should be shown?
Worked example
A business expects to sell 2,400 lamps at $35 each. Calculate budgeted sales revenue.
Show the worked solution
- Use the number of units sold: 2,400.
- Multiply by the budgeted price: 2,400 × $35.
- Label the revenue for the period.
Answer Budgeted sales revenue = $84,000.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
Forecast sales are 3,200 notebooks at $15 each. Calculate sales revenue.
Give me a hint
Multiply units by price and keep dollars as the final unit.
Compare my reasoning
- Units = 3,200.
- Price = $15 per notebook.
- 3,200 × $15 = $48,000.
$48,000 budgeted sales revenue.
Look for these in your work
- Units identified
- Price applied
- Revenue labelled
A firm budgets 1,800 premium units at $42 and 2,500 standard units at $28. Calculate total sales revenue.
Give me a hint
Calculate each product line first.
Compare my reasoning
- Premium revenue = 1,800 × $42 = $75,600.
- Standard revenue = 2,500 × $28 = $70,000.
- Total = $145,600.
$145,600 total budgeted sales revenue.
Look for these in your work
- Premium line correct
- Standard line correct
- Lines totalled
A café raises its forecast price by 10% but expects fewer customers. What evidence should it use before approving the sales budget?
Give me a hint
Test quantity and price assumptions together against demand and capacity.
Compare my reasoning
- Review sales history and customer response to prior price changes.
- Estimate the likely units sold at the revised price, not only the higher revenue per unit.
- Check capacity, competitor prices and whether a changed product mix affects costs.
Use demand evidence to forecast both price and quantity, then compare revenue, capacity and costs. A higher unit price does not guarantee higher sales revenue or profit.
Look for these in your work
- Price and quantity linked
- Demand evidence used
- Capacity/cost considered
Common mistakes
- Adding a unit price to a sales quantity
- Mixing monthly and annual figures
- Treating forecast units as guaranteed demand
What can you explain now?
How is budgeted sales revenue calculated?
Compare with the explanation
Budgeted units sold × budgeted selling price per unit
Revenue is based on units expected to be sold and their expected selling price.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
Name two evidence sources for a sales forecast and state the sales-revenue formula.
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.