Question

Forecast Sales Volume and 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:

1. Unit Sales
   	8" × 10" Frame		12" × 16" Frame
   East	31,200		9,240
   Central	7,956		3,626
   West	6,984		3,090

   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		30,000		$30		$900,000
   Central		7,800		30		234,000
   West		7,200		30		216,000
   Total		45,000				$1,350,000
   12" × 16" Frame:
   East		8,800		$45		$396,000
   Central		3,700		45		166,500
   West		3,000		45		135,000
   Total		15,500				$697,500
   Total revenue from sales						$2,047,500

   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 $31 and the unit selling price for the 12" × 16" frame is expected to increase to $47, effective January 1, 20Y7.

   Required:

   1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y6, 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 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			%

   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