Forecast Sales Volume and Sales Budget For 20Y8, Raphael Frame Company prepared

Question

Forecast Sales Volume and Sales Budget

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:

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 $27 and the unit selling price for the 12" × 16" frame is expected to increase to $29, 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.

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.

3.  Prepare a sales budget for the year ending December 31, 20Y9.

Unit Sales 8" × 10" Frame 12" × 16" Frame East 22,365 15,052 Central 5,253 3,626 West 4,512 2,678

Explanation / Answer

1) Calculation of increase or decrease in unit sales over budget

2) Sales budget for the year ending December 31, 20Y9

Round budgeted units to the nearest whole unit.

3)

Unit Sales,
Year Ended 20Y8 Increase (Decrease)
Actual Over Budget Budget Actual Sales Amount Percent 8" × 10" Frame: East 22,365 21,300 -1,065 -5% Central 5,253 5,100 -153 -3% West 4,512 4,700 188 4% 12" × 16" Frame: East 15,052 14,200 -852 -6% Central 3,626 3,700 74 2% West 2,678 2,600 -78 -3%

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