Question

For 20Y8, Raphael Frame Company prepared the sales budget that follows. At the end of December 20Y8, the following unit sales data were reported for the year: Unit Sales 8" × 10" Frame 12" × 16" Frame East 22,660 15,496 Central 5,959 6,272 West 5,280 5,356 Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y8 Product and Area Unit Sales Volume Unit Selling Price Total Sales 8" × 10" Frame: East 22,000 $28 $616,000 Central 5,900 28 165,200 West 5,500 28 154,000 Total 33,400 $935,200 12" × 16" Frame: East 14,900 $38 $566,200 Central 6,400 38 243,200 West 5,200 38 197,600 Total 26,500 $1,007,000 Total revenue from sales $1,942,200 For the year ending December 31, 20Y9, unit sales are expected to follow the patterns established during the year ending December 31, 20Y8. The unit selling price for the 8" × 10" frame is expected to increase to $29 and the unit selling price for the 12" × 16" frame is expected to increase to $40, effective January 1, 20Y9. Required: 1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y8, over budget. Use the minus sign to indicate a decrease in amount and percent. Round percents to the nearest whole percent. Unit Sales, Year Ended 20Y8 Increase (Decrease) Actual Over Budget Budget Actual Sales Amount Percent 8" × 10" Frame: East % Central % West % 12" × 16" Frame: East % Central % West % 2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 20Y9, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y9. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit. 20Y8 Actual Units Percentage Increase (Decrease) 20Y9 Budgeted Units (rounded) 8" × 10" Frame: East % Central % West % 12" × 16" Frame: East % Central % West % 3. Prepare a sales budget for the year ending December 31, 20Y9. Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y9 Product and Area Unit Sales Volume Unit Selling Price Total Sales 8" × 10" Frame: East $ $ Central West Total $ 12" × 16" Frame: East $ $ Central West Total $ Total revenue from sales $

Answer 1

1.

	Unit Sales	Increase (Decrease)
	Budget	Actual Sales	Amount	Percent
8" × 10" Frame:
East	22,000	22,660	660	3%
Central	5,900	5,959	59	1%
West	5,500	5,280	-220	-4%
12" × 16" Frame:
East	14,900	15,496	596	4%
Central	6,400	6,272	-128	-2%
West	5,200	5,356	156	3%

2.

	Actual units	Increase (Decrease)	Budgeted units
Units
8" × 10" Frame:
East	22,660	3%	23,340
Central	5,959	1%	6,019
West	5,280	-4%	5,069
12" × 16" Frame:
East	15,496	4%	16,116
Central	6,272	-2%	6,147
West	5,356	3%	5,517

3.

Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
8" × 10" Frame:
East	23,340	$29	$676,860
Central	6,019	$29	$174,551
West	5,069	$29	$147,001
Total	34,428		$998,412
12" × 16" Frame:
East	16,116	$40	$644,640
Central	6,147	$40	$245,880
West	5,517	$40	$220,680
Total	27,780		$1,111,200
Total revenue from sales			$2,109,612