Question

Forecast Sales Volume and Sales Budget

Raphael Frame Company prepared the following sales budget for 2016:

Raphael Frame Company Sales Budget For the Year Ending December 31, 2016
Product and Area		Unit Sales Volume		Unit Selling Price		Total Sales
8" × 10" Frame:
East		8,500		$16		$136,000
Central		6,200		16		99,200
West		12,600		16		201,600
Total		27,300				$436,800
12" × 16" Frame:
East		3,800		$30		$114,000
Central		3,000		30		90,000
West		5,400		30		162,000
Total		12,200				$366,000
Total revenue from sales						$802,800

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

	Unit Sales
	8" × 10" Frame		12" × 16" Frame
East	8,755		3,686
Central	6,510		3,090
West	12,348		5,616

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 $17 and the unit selling price for the 12" × 16" frame is expected to increase to $32, effective January 1, 2017.

Required:

• Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, over budget.
• 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.
• Prepare a sales budget for the year ending December 31, 2017.

• 1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, over budget.

  Enter any decreases beginning with a minus (-) sign.

  		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.

  Enter any decreases beginning with a minus (-) sign. Round budgeted units to the nearest whole unit.

  		2016 Actual Units		Percentage Increase (Decrease)	2017 Budgeted Units (rounded)
  8" × 10" Frame:
  	East			%
  	Central			%
  	West			%
  12" × 16" Frame:
  	East			%
  	Central			%
  	West			%

  .  Prepare a sales budget for the year ending December 31, 2017.

  Raphael Frame Company
  Sales Budget
  For the Year Ending December 31, 2017
  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		Increase (Decrease) Actual over budget
		Budget	Actual Sales	Difference	Percent
8" x 10' Frame :
	East	8500	8755	255	3.0%
	Central	6200	6510	310	5.0%
	West	12600	12348	-252	-2.0%
12"x 16" Frame :
	East	3800	3686	-114	-3.0%
	Central	3000	3090	90	3.0%
	West	5400	5616	216	4.0%

(2)

		2016 Actual units	% Increase / Decrease	2017 Budgeted units
8" x 10' Frame :
	East	8755	3.0%	9018
	Central	6510	5.0%	6836
	West	12348	-2.0%	12101
12"x 16" Frame :
	East	3686	-3.0%	3575
	Central	3090	3.0%	3183
	West	5616	4.0%	5841

Raphael Frame Company Sales Budget For the year ending December 31,2017
Product and Area	Unit sales volume	Unit selling price	Total sales
8" x 10" Frame :
East	9018	$17	$1,53,306
Central	6836	$17	$1,16,212
West	12101	$17	$2,05,717
Total			$4,75,235
12" x 16" Frame :
East	3575	$32	$1,14,400
Central	3183	$32	$1,01,856
West	5841	$32	$1,86,912
Total			$4,03,168
Total Revenue from sales			$8,78,403

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