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 $24 and the unit selling price for the 12" × 16" frame is expected to increase to $35, 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 23,310 11,024 Central 6,180 4,312 West 5,432 3,605

Explanation / Answer

1.

2.

3.

Budget Actual Sales Amount Percent 8" × 10" Frame: East 22200 23310 1110 5 % Central 6000 6180 4140 3 % West 5600 5432 -168 -3 % 12" × 16" Frame: East 10400 11024 624 6 % Central 4400 4312 -88 -2 % West 3500 3605 105 3 %

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