Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 22, Problem 22.1APR
For 20Y6, Raphael Frame Company prepared the sales budget that follows.
At the end of December 20Y6, the following unit sales data were reported for the year:
| Unit Sales | ||
| 8" × 10" Frame | 12" × 16" Frame | |
| East | 8,755 | 3,686 |
| Central | 6,510 | 3,090 |
| West | 12,348 | 5,616 |
| Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y6 | |||
| Unit Sales | Unit Selling | Total | |
| Product and Area | Volume | Price | Sales |
| 8"×10" Frame: | |||
| East | 8,500 | $16 | $136,000 |
| Central | 6,200 | 16 | 99,200 |
| West | 12,600 | 16 | 201,600 |
| Total | 27,300 | $436,800 | |
| 12" x 16" Frame: | |||
| East | 3,800 | $30 | 5114,000 |
| Central | 3,000 | 30 | 90,000 |
| West | 5,400 | 30 | 162,000 |
| Total | 12,200 | $366,000 | |
| Total revenue from sales | $802,800 | ||
For the year ending December 31, 20Y7, unit sales are expected to follow the patterns established during the year ending December 31, 20Y6. 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, 20Y7.
Instructions
- 1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y6, over budget. Place your answers in a columnar table with the following format:
| Unit Sales, Year Ended 20Y6 | Increase (Decrease) Actual Over Budget | |
| Budget Actual Sales | Amount Percent | |
| 8" ×10" Frame: | ||
| East | ||
| Central | ||
| West | ||
| 12"×16" Frame: | ||
| East | ||
| Central | ||
| West |
- 2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 20Y7, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y7. 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.
| 20Y6 | Percentage | 20Y7 |
| Actual | Increase | Budgeted |
| Units | (Decrease! | Units (rounded) |
- 3. Prepare a sales budget for the year ending December 31, 20Y7.
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Chapter 22 Solutions
Accounting
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