Question

In: Accounting

For 20Y8, Raphael Frame Company prepared the sales budget that follows. At the end of December...

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	26,565	15,688
Central	7,004	3,528
West	6,048	2,448

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	25,300	$29	$733,700
Central	6,800	29	197,200
West	6,300	29	182,700
Total	38,400		$1,113,600

12" × 16" Frame:
East	14,800	$30	$444,000
Central	3,600	30	108,000
West	2,400	30	72,000
Total	20,800		$624,000
Total revenue from sales			$1,737,600

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 $30 and the unit selling price for the 12" × 16" frame is expected to increase to $32, 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			$

Expert Solution

Answer -

1. Answer -

	Units sales, Year ended 20Y8		Increase (Decrease) Actual over budget
	Budget	Actual sales	Amount	Percent
8" * 10" Frame:
East	25,300	26,565	1,265	5%
Central	6,800	7,004	204	3%
West	6,300	6,048	-252	-4%
12" * 16" Frame:
East	14,800	15,688	888	6%
Central	3,600	3,528	-72	-2%
West	2,400	2,448	48	2%

Calculation:

8" * 10" Frame:

East:

Increase (Decrease) actual over budget (amount) = Actual units sales - Budgeted units sales

= 26,565 - 25,300

= 1,265

Increase (Decrease) actual over budget (Percent) = [(Actual units sales - Budgeted units sales) / Budgeted units sales] * 100

= [(26,565 - 25,300) / 25,300] * 100

= 5%

Central:

Increase (Decrease) actual over budget (amount) = Actual units sales - Budgeted units sales

= 7,004 - 6,800

= 214

Increase (Decrease) actual over budget (Percent) = [(Actual units sales - Budgeted units sales) / Budgeted units sales] * 100

= [(7,004 - 6,800) / 6,800] * 100

= 3%

West:

Increase (Decrease) actual over budget (amount) = Actual units sales - Budgeted units sales

= 6,048 - 6,300

= -252

Increase (Decrease) actual over budget (Percent) = [(Actual units sales - Budgeted units sales) / Budgeted units sales] * 100

= [(6,048 - 6,300) / 6,300] * 100

= -4%

12" * 16" Frame:

East:

Increase (Decrease) actual over budget (amount) = Actual units sales - Budgeted units sales

= 15,688 - 14,800

= 888

Increase (Decrease) actual over budget (Percent) = [(Actual units sales - Budgeted units sales) / Budgeted units sales] * 100

= [(15,688 - 14,800) / 14,800] * 100

= 6%

Central:

Increase (Decrease) actual over budget (amount) = Actual units sales - Budgeted units sales

= 3,528 - 3,600

= -72

Increase (Decrease) actual over budget (Percent) = [(Actual units sales - Budgeted units sales) / Budgeted units sales] * 100

= [(3,528 - 3,600) / 3,600] * 100

= -2%

West:

Increase (Decrease) actual over budget (amount) = Actual units sales - Budgeted units sales

= 2,448 - 2,400

= 48

Increase (Decrease) actual over budget (Percent) = [(Actual units sales - Budgeted units sales) / Budgeted units sales] * 100

= [(2,448 - 2,400) / 2,400] * 100

= 2%

2. Answer -

	20Y8 Actual units	Percentage increase (decrease)	20Y9 Budgeted units (rounded)
8" * 10" Frame:
East	26,565	5%	27,893
Central	7,004	3%	7,214
West	6,048	-4%	5,806
12" * 16" Frame:
East	15,688	6%	16,629
Central	3,528	-2%	3,457
West	2,448	2%	2,497

Calculation:

8" * 10" Frame:

East: