recast Sales Volume and 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 23,415 9,858 Central 6,180 3,626 West 5,432 3,090 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 22,300 $24 $535,200 Central 6,000 24 144,000 West 5,600 24 134,400 Total 33,900 $813,600 12" × 16" Frame: East 9,300 $34 $316,200 Central 3,700 34 125,800 West 3,000 34 102,000 Total 16,000 $544,000 Total revenue from sales $1,357,600 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 $25 and the unit selling price for the 12" × 16" frame is expected to increase to $36, effective January 1, 20Y9. Required:
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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 | 23,415 | 9,858 | ||
| Central | 6,180 | 3,626 | ||
| West | 5,432 | 3,090 |
| 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 | 22,300 | $24 | $535,200 | |||
| Central | 6,000 | 24 | 144,000 | |||
| West | 5,600 | 24 | 134,400 | |||
| Total | 33,900 | $813,600 | ||||
| 12" × 16" Frame: | ||||||
| East | 9,300 | $34 | $316,200 | |||
| Central | 3,700 | 34 | 125,800 | |||
| West | 3,000 | 34 | 102,000 | |||
| Total | 16,000 | $544,000 | ||||
| Total revenue from sales | $1,357,600 |
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 $25 and the unit selling price for the 12" × 16" frame is expected to increase to $36, 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.
| Unit Sales, Year Ended 20Y8 |
Increase (Decrease) Actual Over Budget |
||||
| Budget | Actual Sales | Amount | Percent | ||
| 8" × 10" Frame: | |||||
| East | fill in the blank 57160afd2ff9fe8_1 | fill in the blank 57160afd2ff9fe8_2 | fill in the blank 57160afd2ff9fe8_3 | fill in the blank 57160afd2ff9fe8_4 % | |
| Central | fill in the blank 57160afd2ff9fe8_5 | fill in the blank 57160afd2ff9fe8_6 | fill in the blank 57160afd2ff9fe8_7 | fill in the blank 57160afd2ff9fe8_8 % | |
| West | fill in the blank 57160afd2ff9fe8_9 | fill in the blank 57160afd2ff9fe8_10 | fill in the blank 57160afd2ff9fe8_11 | fill in the blank 57160afd2ff9fe8_12 % | |
| 12" × 16" Frame: | |||||
| East | fill in the blank 57160afd2ff9fe8_13 | fill in the blank 57160afd2ff9fe8_14 | fill in the blank 57160afd2ff9fe8_15 | fill in the blank 57160afd2ff9fe8_16 % | |
| Central | fill in the blank 57160afd2ff9fe8_17 | fill in the blank 57160afd2ff9fe8_18 | fill in the blank 57160afd2ff9fe8_19 | fill in the blank 57160afd2ff9fe8_20 % | |
| West | fill in the blank 57160afd2ff9fe8_21 | fill in the blank 57160afd2ff9fe8_22 | fill in the blank 57160afd2ff9fe8_23 | fill in the blank 57160afd2ff9fe8_24 % |
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 | fill in the blank 57160afd2ff9fe8_25 | fill in the blank 57160afd2ff9fe8_26 % | fill in the blank 57160afd2ff9fe8_27 | |
| Central | fill in the blank 57160afd2ff9fe8_28 | fill in the blank 57160afd2ff9fe8_29 % | fill in the blank 57160afd2ff9fe8_30 | |
| West | fill in the blank 57160afd2ff9fe8_31 | fill in the blank 57160afd2ff9fe8_32 % | fill in the blank 57160afd2ff9fe8_33 | |
| 12" × 16" Frame: | ||||
| East | fill in the blank 57160afd2ff9fe8_34 | fill in the blank 57160afd2ff9fe8_35 % | fill in the blank 57160afd2ff9fe8_36 | |
| Central | fill in the blank 57160afd2ff9fe8_37 | fill in the blank 57160afd2ff9fe8_38 % | fill in the blank 57160afd2ff9fe8_39 | |
| West | fill in the blank 57160afd2ff9fe8_40 | fill in the blank 57160afd2ff9fe8_41 % | fill in the blank 57160afd2ff9fe8_42 |
3. Prepare a sales budget for the year ending December 31, 20Y9.
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
| 8" × 10" Frame: | |||
| East | fill in the blank d43801f5203af90_1 | $fill in the blank d43801f5203af90_2 | $fill in the blank d43801f5203af90_3 |
| Central | fill in the blank d43801f5203af90_4 | fill in the blank d43801f5203af90_5 | fill in the blank d43801f5203af90_6 |
| West | fill in the blank d43801f5203af90_7 | fill in the blank d43801f5203af90_8 | fill in the blank d43801f5203af90_9 |
| Total | fill in the blank d43801f5203af90_10 | $fill in the blank d43801f5203af90_11 | |
| 12" × 16" Frame: | |||
| East | fill in the blank d43801f5203af90_12 | $fill in the blank d43801f5203af90_13 | $fill in the blank d43801f5203af90_14 |
| Central | fill in the blank d43801f5203af90_15 | fill in the blank d43801f5203af90_16 | fill in the blank d43801f5203af90_17 |
| West | fill in the blank d43801f5203af90_18 | fill in the blank d43801f5203af90_19 | fill in the blank d43801f5203af90_20 |
| Total | fill in the blank d43801f5203af90_21 | $fill in the blank d43801f5203af90_22 | |
| Total revenue from sales | $fill in the blank d43801f5203af90_23 |
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