Question

1. Forecast Sales Volume and One of the major elements of the income statement budget that indicates the quantity of estimated sales and the expected unit selling price.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	25,725		13,992
   Central	6,283		5,292
   West	5,432		4,532

   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		24,500		$27		$661,500
   Central		6,100		27		164,700
   West		5,600		27		151,200
   Total		36,200				$977,400
   12" × 16" Frame:
   East		13,200		$37		$488,400
   Central		5,400		37		199,800
   West		4,400		37		162,800
   Total		23,000				$851,000
   Total revenue from sales						$1,828,400

   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 $28 and the unit selling price for the 12" × 16" frame is expected to increase to $39, effective January 1, 20Y9.

   Required:

   1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y8, over An accounting device used to plan and control resources of operational departments and divisions.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			%

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   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			$

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Answer 1

Answer 1

	Unit Sales, Year Ended 20Y8		Increase (Decrease) Actual Over Budget
	Budget	Actual Sales	Amount	Percent
8" × 10" Frame:
East	24,500	25,725	$ 1,225	5%
Central	6,100	6,283	$    183	3%
West	5,600	5,432	$   (168)	-3%
12" × 16" Frame:
East	13,200	13,992	$    792	6%
Central	5,400	5,292	$   (108)	-2%
West	4,400	4,532	$    132	3%

Answer 2

		Percentage	20Y9
	20Y8	Increase	Budgeted
	Actual	(Decrease)	Units (rounded)
Units
8" × 10" Frame:
East	25,725	5%	27,011
Central	6,283	3%	6,471
West	5,432	-3%	5,269
12" × 16" Frame:
East	13,992	6%	14,832
Central	5,292	-2%	5,186
West	4,532	3%	4,668

Answer 3

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	27,011	$                      28	$     756,315
Central	6,471	$                      28	$     181,202
West	5,269	$                      28	$     147,533
Total	38,752	$                      28	$ 1,085,050
12" × 16" Frame:
East	14,832	$                      39	$     578,429
Central	5,186	$                      39	$     202,260
West	4,668	$                      39	$     182,050
Total	24,686	$                      39	$     962,740
Total revenue from sales			$ 2,047,790

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