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: Unit Sales 8" × 10" Frame 12" × 16" Frame East 26,250 10,282 Central 7,004 3,724 West 6,111 3,060 Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y8 Product and Area Unit Sales Volume Unit Selling Price Total Sales 8" × 10" Frame: East 25,000 $14 $350,000 Central 6,800 14 95,200 West 6,300 14 88,200 Total 38,100 $533,400 12" × 16" Frame: East 9,700 $24 $232,800 Central 3,800 24 91,200 West 3,000 24 72,000 Total 16,500 $396,000 Total revenue from sales $929,400 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 $15 and the unit selling price for the 12" × 16" frame is expected to increase to $26, 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. Unit Sales, Year Ended 20Y8 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 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. 20Y8 Actual Units Percentage Increase (Decrease) 20Y9 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, 20Y9. Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y9 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

Please find a below table useful to compute desired results: -

A B D E Computation of Increase or decrease of actual unit sales over budget Unit Sales, Year Ended 2048 Increase (Decrease) Actual Over Budget Budget Actual Sales Difference Percent 25000 6800 26250 7004 6111 =C5-B5 =C6-B6 =C7-B7 =D5/B5 =D6/B6 =D7/B7 6300 4 8"*10 Frame: 5 East 6 Central 7 West 8 12"*16" Frame 9 East 10 Central 11 West 9700 3800 3000 10282 3724 3060 =C9-B9 =C10-B10 =C11-B11 =D9/B9 =D10/B10 =D11/B11 12 Computation of unit sales volume for preparing sales budget 2048 Actual Units Percent Increase (Decrease) 2049 Budgeted Units(rounded) 13 14 15 8"*10 Frame: 16 East 17 Central 18 West 19 12"*16" Frame 20 East 21 Central 22 West 26250 7004 6111 =E5 =E6 =E7 =B16+B16*C16 =B17+B17*C17 =B18+B18*C18 10282 3724 3060 =E9 =E10 =E11 =B20+B20*C20 =B21+B21*C21 =B22+B22*C22

B 15 Raphael Frame Company Sales Budget For the Year Ending December 31, 20X9 27 Product and Area Unit Sales Volume Unit Selling Price Total Sales 28 8"*10 Frame: 29 East =D16 =B29*C29 30 Central =B30*C30 31 West =D18 =B31*C31 32 Total =SUMD29:D31) 33 12" 16" Frame 34 East =D20 =B34*C34 35 Central =D21 =B35*C35 36 West =D22 =B36*C36 37 Total =SUMD34:D36) 38 Total Revenue from sales =D32+D37

End results would be as follows: -

B Ε Computation of Increase or decrease of actual unit sales over budget Unit Sales, Year Ended 20Y8 Increase (Decrease) Actual Over Budget Budget Actual Sales Difference Percent 25,000 6.800 6,300 26.250 7.004 6,111 1.250 54 2043% (189) -3% 4 8"*10 Frame: 5 East 6 Central 7 West 8 12"*16" Frame 9 East 10 Central 11 West 12 13 9.700 3.800 3,000 6% 10,282 3.724 3,060 582 (76) 60 Computation of unit sales volume for preparing sales budget 20Y8 Actual Units Percent Increase Decrease) 2049 Budgeted Units(rounded) 14 5% 26,250 7,004 6.111 3% -3% 27,563 7,214 5,928 15 8"*10 Frame: 16 East 17 Central 18 West 19 12"*16" Frame 20 East 21 Central 22 West 6% 10,282 3.724 3.060 2% 10,899 3,650 3.121 29

А D Raphael Frame Company Sales Budget For the Year Ending December 31, 20X9 27 Product and Area Unit Sales Volume Unit Selling Price Total Sales 28 8"*10 Frame: 29 East 27.563 15 30 Central 7,214 31 West 5,928 32 Total 33 12"*16" Frame 34 East 10.899 35 Central 3,650 36 West 3.121 37 Total 38 Total Revenue from sales 413.438 108,212 88.915 610,564 283,372 94.888 81.151 459,411 1,069,975