# Forecast sales volume and sales budget 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.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 22, Problem 22.1APR
Textbook Problem

## Forecast sales volume and sales budget 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.

Expert Solution

1.

To determine

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.

To Compute: The increase or decrease of actual unit sales for the year ended December 31, 20Y6, over budget.

### Explanation of Solution

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

 Details Unit sales, Year Ended 20Y6 Increase (Decrease) Actual Over Budget Budget Actual Amount (\$) Percent (%) (A) (B) (C) = (B) – (A) (D) = (C)/(A) × 100 8” × 10” Frame: East
Expert Solution

2.

To determine

To Compute: The unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y7.

Expert Solution

3.

To determine

To Prepare: The sales budget for the year ending December 31, 20Y7.

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