Forecast Sales Volume and Sales Budget Guardian Framing Inc. prepared the follow

Question

Forecast Sales Volume and Sales Budget

Guardian Framing Inc. prepared the following sales budget for 2016:

At the end of December 2016, the following unit sales data were reported for the year:

For the year ending December 31, 2017, unit sales are expected to follow the patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $31 and the unit selling price for the 12" × 16" frame is expected to increase to $47, effective January 1, 2017.

Required:

1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, 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 2017, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2017. 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, 2017.

Guardian Framing Inc.
Sales Budget
For the Year Ending December 31, 2016 Product and Area Unit Sales
Volume Unit Selling
Price Total Sales 8" × 10" Frame: East 30,100 $30 $903,000 Central 8,100 30 243,000 West 7,500 30 225,000 Total 45,700 $1,371,000 12" × 16" Frame: East 14,800 $45 $666,000 Central 4,100 45 184,500 West 3,000 45 135,000 Total 21,900 $985,500 Total revenue from sales $2,356,500

Explanation / Answer

1) Unit Sales, Increase (Decrease) Year Ended 2016 Actual Over Budget Budget Actual Sales Difference Percent 8" × 10" Frame: East 30100 31003 903 2.91% Central 8100 8181 81 0.99% West 7500 7200 -300 -4.17% 12" × 16" Frame: East 14800 15392 592 3.85% Central 4100 4018 -82 -2.04% West 3000 3060 60 1.96% 2) 2016 Percentage 2017 Actual Increase Budgeted Units (Decrease) Units (rounded) 8" × 10" Frame: East 31003 2.91% 31906 Central 8181 0.99% 8262 West 7200 -4.17% 6900 12" × 16" Frame: East 15392 3.85% 15984 Central 4018 -2.04% 3936 West 3060 1.96% 3120 3) Product and Area Unit Sales Volume Unit Selling Price Total Sales 8" × 10" Frame: East 31906 30 957180 Central 8262 30 247860 West 6900 30 207000 Total 1412040 12" × 16" Frame: East 15984 45 719280 Central 3936 45 177120 West 3120 45 140400 Total 1036800 Total revenue from sales 2448840

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