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Forecast 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: 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 $17 and the unit selling price for the 12" ×16" frame is expected to increase to $32, effective January 1, 20Y9. Instructions Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y8, over budget. Place your answers in a columnar table with the following format: 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. Place your answers in a columnar table similar to that in part (1) but with the following column heads. Round budgeted units to the nearest unit. Prepare a sales budget for the year ending December 31, 20Y9.

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 22, Problem 1PA
Textbook Problem
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Forecast 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:

Chapter 22, Problem 1PA, Forecast sales volume and sales budget For 20Y8, Raphael Frame Company prepared the sales budget , example  1

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 $17 and the unit selling price for the 12" ×16" frame is expected to increase to $32, effective January 1, 20Y9.

Instructions

Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y8, over budget. Place your answers in a columnar table with the following format:

Chapter 22, Problem 1PA, Forecast sales volume and sales budget For 20Y8, Raphael Frame Company prepared the sales budget , example  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. Place your answers in a columnar table similar to that in part (1) but with the following column heads. Round budgeted units to the nearest unit.

Chapter 22, Problem 1PA, Forecast sales volume and sales budget For 20Y8, Raphael Frame Company prepared the sales budget , example  3

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

1.

To determine

Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y8, over budget.

Explanation of Solution

Budgeting:

Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.

The following table shows the increase or decrease of actual unit sales.

DetailsUnit sales, Year Ended 20Y6Increase (Decrease) Actual Over Budget
BudgetActualAmount ($)Percent (%)
(A)(B)(C) = (B) – (A)(D) = (C)/(A) × 100
8” × 10” Frame:

2.

To determine

Compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y9.

3.

To determine

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

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Chapter 22 Solutions

Financial And Managerial Accounting
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