Question

Forecast Sales Volume and Sales Budget

Guardian Framing Inc. prepared the following sales budget for 2016:

Guardian Framing Inc. Sales Budget For the Year Ending December 31, 2016
Product and Area		Unit Sales Volume		Unit Selling Price		Total Sales
8" × 10" Frame:
East		18,800		$23		$432,400
Central		4,900		23		112,700
West		4,500		23		103,500
Total		28,200				$648,600
12" × 16" Frame:
East		12,500		$24		$300,000
Central		2,900		24		69,600
West		1,900		24		45,600
Total		17,300				$415,200
Total revenue from sales						$1,063,800

At the end of December 2016, the following unit sales data were reported for the year:

	Unit Sales
	8" × 10"		12" × 16"
East	19,364		13,000
Central	4,949		2,842
West	4,320		1,938

For the year ending December 31, 2017, unit sales are expected to follow the patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $24 and the unit selling price for the 12" × 16" frame is expected to increase to $26, effective January 1, 2017.

Required:

1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, 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 2016				Increase (Decrease) Actual Over Budget
		Budget		Actual Sales		Difference	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 2017, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2017. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit.

Answer 1

Answer 1.
	Unit Sales Year Ended 2016		Increase (Decrease) Actual over Budget
	Budget	Actual	Unit	Percent
8" X 10" Frame:
East	18,800	19,364	564	3%
Central	4,900	4,949	49	1%
West	4,500	4,320	(180)	-4%
12" X 16" Frame:
East	12,500	13,000	500	4%
Central	2,900	2,842	(58)	-2%
West	1,900	1,938	38	2%
Answer 2.
	2016 Actual Units	Percentage Increase (Decrease)	2017 Budgeted Units (rounded)
8" X 10" Frame:
East	19,364	3%	19,945
Central	4,949	1%	4,998
West	4,320	-4%	4,147
12" X 16" Frame:
East	13,000	4%	13,520
Central	2,842	-2%	2,785
West	1,938	2%	1,977