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 $27 and the unit selling price for the 12" × 16" frame is expected to increase to $29, 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 30,700 $26 $798,200 Central 7,700 26 200,200 West 7,100 26 184,600 Total 45,500 $1,183,000 12" × 16" Frame: East 10,300 $27 $278,100 Central 3,500 27 94,500 West 2,700 27 72,900 Total 16,500 $445,500 Total revenue from sales $1,628,500

Explanation / Answer

1)

2)

3)

Sales Budget for the year ended 31st Dec 2017

Unit Sales, Increase (Decrease) Year Ended 2016 Actual Over Budget Budget Actual Sales Difference Percent 8" × 10" Frame: East 30700 32235 1535 5.00% Central 7700 7931 231 3.00% West 7100 6887 -213 -3.00% 12" × 16" Frame: East 10300 10918 618 6.00% Central 3500 3430 -70 -2.00% West 2700 2754 54 2.00%

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