For 20Y8, Raphael Frame Company prepared the sales budget that follows. At the e

Question

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:

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 $22 and the unit selling price for the 12" × 16" frame is expected to increase to $38, 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.

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.

3.  Prepare a sales budget for the year ending December 31, 20Y9.

Unit Sales 8" × 10" 12" × 16" East 20,685 16,112 Central 5,253 6,370 West 4,512 5,406

Explanation / Answer

1. Increase (Decrease) Unit Sales, Year Ended 20Y8 Actual Over Budget Budget Actual Sales Amount Percent 8" x 10" Frame: East     19,700     20,685 20,685-19,700 985/19,700 Central       5,100       5,253 5,253-5,100 153/5,100 West       4,700       4,512 4,512-4,700 -188/4,700 12" x 16" Frame: East     15,200     16,112 16,112-15,200 912/15,200 Central       6,500       6,370 6,370-6,500 -130/6,500 West       5,300       5,406 5,406-5,300 106/5,300

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