Question

Forecast Sales Volume and Sales Budget

For 20Y6, Raphael Frame Company prepared the sales budget thatfollows.

At the end of December 20Y6, the following unit sales data werereported for the year:

	Unit Sales
	8" × 10" Frame		12" × 16" Frame
East	20,909		11,856
Central	5,555		3,822
West	4,896		3,090

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		20,300		$17		$345,100
Central		5,500		17		93,500
West		5,100		17		86,700
Total		30,900				$525,300
12" × 16" Frame:
East		11,400		$32		$364,800
Central		3,900		32		124,800
West		3,000		32		96,000
Total		18,300				$585,600
Total revenue from sales						$1,110,900

For the year ending December 31, 20Y7, unit sales are expectedto follow the patterns established during the year ending December31, 20Y6. The unit selling price for the 8" × 10" frame is expectedto increase to $18 and the unit selling price for the 12" × 16"frame is expected to increase to $34, effective January 1,20Y7.

Required:

1. Compute the increase or decrease of actualunit sales for the year ended December 31, 20Y6, over budget. Usethe minus sign to indicate a decrease in amount and percent. Roundpercents to the nearest whole percent.

		Unit Sales, Year Ended 20Y6				Increase (Decrease) Actual Over Budget
		Budget		Actual Sales		Difference	Percent
8" × 10" Frame:
	East						%
	Central						%
	West						%
12" × 16" Frame:
	East						%
	Central						%
	West						%

2. Assuming that the increase or decrease inactual sales to budget indicated in part (1) is to continue in20Y7, compute the unit sales volume to be used for preparing thesales budget for the year ending December 31, 20Y7. Use the minussign to indicate a decrease in percent. Round budgeted units to thenearest 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 theyear ending December 31, 20Y7.

Raphael Frame Company
SalesBudget
Forthe 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			$