Question

1. Forecast Sales Volume and One of the major elements of the income statement budget that indicates the quantity of estimated sales and the expected unit selling price.Sales Budget

   For 20Y6, Raphael Frame Company prepared the sales budget that follows.

   At the end of December 20Y6, the following unit sales data were reported for the year:

   	Unit Sales
   	8" × 10" Frame		12" × 16" Frame
   East	31,106		15,080
   Central	7,676		6,076
   West	6,693		5,202

   Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y6
   Product and Area		Unit Sales Volume		Unit Selling Price		Total Sales
   8" × 10" Frame:
   East		30,200		$25		$755,000
   Central		7,600		25		190,000
   West		6,900		25		172,500
   Total		44,700				$1,117,500
   12" × 16" Frame:
   East		14,500		$26		$377,000
   Central		6,200		26		161,200
   West		5,100		26		132,600
   Total		25,800				$670,800
   Total revenue from sales						$1,788,300

   For the year ending December 31, 20Y7, unit sales are expected to follow the patterns established during the year ending December 31, 20Y6. The unit selling price for the 8" × 10" frame is expected to increase to $26 and the unit selling price for the 12" × 16" frame is expected to increase to $28, effective January 1, 20Y7.

   Required:

   1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y6, over An accounting device used to plan and control resources of operational departments and divisions.budget. Use the minus sign to indicate a decrease in amount and percent. Round percents to the nearest whole percent.

   		Unit Sales, Year Ended 20Y6				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 20Y7, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y7. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit.

   		20Y6 Actual Units		Percentage Increase (Decrease)	20Y7 Budgeted Units (rounded)
   8" × 10" Frame:
   	East			%
   	Central			%
   	West			%
   12" × 16" Frame:
   	East			%
   	Central			%
   	West			%

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   3. Prepare a sales budget for the year ending December 31, 20Y7.

   Raphael Frame Company
   Sales Budget
   For the Year Ending December 31, 20Y7
   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

Answer 1

	Unit Sales,Year Ended 20Y8	Increase (Decrease) Actual Over Budget
	Budget	Actual Sales	Amount	Percent
8" × 10" Frame:
East	30,200	31,106	$     906	3%
Central	7,600	7,676	$        76	1%
West	6,900	6,693	$    (207)	-3%
12" × 16" Frame:
East	14,500	15,080	$     580	4%
Central	6,200	6,076	$    (124)	-2%
West	5,100	5,202	$     102	2%

Answer 2

		Percentage	20Y9
	20Y8	Increase	Budgeted
	Actual	(Decrease)	Units (rounded)
Units
8" × 10" Frame:
East	31,106	3%	32,039
Central	7,676	1%	7,753
West	6,693	-3%	6,492
12" × 16" Frame:
East	15,080	4%	15,683
Central	6,076	-2%	5,954
West	5,202	2%	5,306

Answer 3

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	32,039	$                      26	$      833,019
Central	7,753	$                      26	$      201,572
West	6,492	$                      26	$      168,797
Total	46,284	$                      26	$   1,203,388
12" × 16" Frame:
East	15,683	$                      28	$      439,130
Central	5,954	$                      28	$      166,725
West	5,306	$                      28	$      148,569
Total	26,944	$                      28	$      754,424
Total revenue from sales			$   1,957,812

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