Question

In: Accounting

Forecast Sales Volume and Sales Budget For 20Y8, Raphael Frame Company prepared the sales budget that...

Forecast Sales Volume and Sales Budget

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 22,365 15,052
Central 5,253 3,626
West 4,512 2,678
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 21,300 $26 $553,800
Central 5,100 26 132,600
West 4,700 26 122,200
Total 31,100 $808,600
12" × 16" Frame:
East 14,200 $27 $383,400
Central 3,700 27 99,900
West 2,600 27 70,200
Total 20,500 $553,500
Total revenue from sales $1,362,100

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 $27 and the unit selling price for the 12" × 16" frame is expected to increase to $29, 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 %

Feedback

To calculate the difference subtract budget from actual sales.

Learning Objective 4.

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 $

Solutions

Expert Solution

Solution 1:

Particulars Unit Sales, Increase (Decrease)
Year Ended 20Y8 Actual Over Budget
Budget Actual Sales Amount Percent
8" × 10" Frame:
East 21300 22365 1065 5%
Central 5100 5253 153 3%
West 4700 4512 -188 -4%
12" × 16" Frame:
East 14200 15052 852 6%
Central 3700 3626 -74 -2%
West 2600 2678 78 3%

Solution 2:

Particulars 2018 Actual results Percentage increase (Decrease) 2019 Budgeted Units (rounded)
8" × 10" Frame:
East 22365 5% 23483
Central 5253 3% 5411
West 4512 -4% 4332
12" × 16" Frame:
East 15052 6% 15955
Central 3626 -2% 3553
West 2678 3% 2758

Solution 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 23483 $27.00 $634,041.00
Central 5411 $27.00 $146,097.00
West 4332 $27.00 $116,964.00
Total 33226 $27.00 $897,102.00
12" × 16" Frame:
East 15955 $29.00 $462,695.00
Central 3553 $29.00 $103,037.00
West 2758 $29.00 $79,982.00
Total 22266 $29.00 $645,714.00
Total revenue from sales $1,542,816.00

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