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Forecast Sales Volume and Sales Budget For 20Y6, Raphael Frame Company prepared the sales budget that...

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:

Unit Sales
8" × 10"
Frame
12" × 16"
Frame
East 26,670 13,462
Central 7,107 2,450
West 6,144 1,545
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 25,400 $35 $889,000
Central 6,900 35 241,500
West 6,400 35 224,000
Total 38,700 $1,354,500
12" × 16" Frame:
East 12,700 $36 $457,200
Central 2,500 36 90,000
West 1,500 36 54,000
Total 16,700 $601,200
Total revenue from sales $1,955,700

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 $36 and the unit selling price for the 12" × 16" frame is expected to increase to $38, 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 $

Solutions

Expert Solution

Unit Sales,
Year Ended 20Y6
Increase (Decrease)
Actual Over Budget
Budget Actual Sales Amount Percent
8" × 10" Frame:
East 25400 26670 1270 5%
Central 6900 7107 207 3%
West 6400 6144 -256 -4%
12" × 16" Frame:
East 12700 13462 762 6%
Central 2500 2450 -50 -2%
West 1500 1545 45 3%
Solution 2
20Y6 Actual Sales Percentage Increase (Decrease) 20Y7 Budgeted
Units (rounded)
8" × 10" Frame:
East 26670 5% 28004
Central 7107 3% 7320
West 6144 -4% 5898
12" × 16" Frame:
East 13462 6% 14270
Central 2450 -2% 2401
West 1545 3% 1591
Solution 3
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 28004 36 1008144
Central 7320 36 263520
West 5898 36 212328
Total 41222 1483992
12" × 16" Frame:
East 14270 38 542260
Central 2401 38 91238
West 1591 38 60458
Total 18262 693956
Total revenue from sales 2177948

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