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:
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 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 | 29,664 | 14,144 | ||
| Central | 7,272 | 3,822 | ||
| West | 6,402 | 2,958 |
| Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y6 |
||||||
Product and Area |
Unit Sales Volume |
Unit Selling Price |
Total Sales |
|||
| 8" × 10" Frame: | ||||||
| East | 28,800 | $20 | $576,000 | |||
| Central | 7,200 | 20 | 144,000 | |||
| West | 6,600 | 20 | 132,000 | |||
| Total | 42,600 | $852,000 | ||||
| 12" × 16" Frame: | ||||||
| East | 13,600 | $35 | $476,000 | |||
| Central | 3,900 | 35 | 136,500 | |||
| West | 2,900 | 35 | 101,500 | |||
| Total | 20,400 | $714,000 | ||||
| Total revenue from sales | $1,566,000 |
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 $21 and the unit selling price for the 12" × 16" frame is expected to increase to $37, effective January 1, 20Y7.
Required:
Question Content Area
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y6, 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 20Y6 |
Increase (Decrease) Actual Over Budget |
||||
| Budget | Actual Sales | Amount | Percent | ||
| 8" × 10" Frame: | |||||
| East | fill in the blank c8a547fff05dfcd_1 | fill in the blank c8a547fff05dfcd_2 | fill in the blank c8a547fff05dfcd_3 | fill in the blank c8a547fff05dfcd_4% | |
| Central | fill in the blank c8a547fff05dfcd_5 | fill in the blank c8a547fff05dfcd_6 | fill in the blank c8a547fff05dfcd_7 | fill in the blank c8a547fff05dfcd_8% | |
| West | fill in the blank c8a547fff05dfcd_9 | fill in the blank c8a547fff05dfcd_10 | fill in the blank c8a547fff05dfcd_11 | fill in the blank c8a547fff05dfcd_12% | |
| 12" × 16" Frame: | |||||
| East | fill in the blank c8a547fff05dfcd_13 | fill in the blank c8a547fff05dfcd_14 | fill in the blank c8a547fff05dfcd_15 | fill in the blank c8a547fff05dfcd_16% | |
| Central | fill in the blank c8a547fff05dfcd_17 | fill in the blank c8a547fff05dfcd_18 | fill in the blank c8a547fff05dfcd_19 | fill in the blank c8a547fff05dfcd_20% | |
| West | fill in the blank c8a547fff05dfcd_21 | fill in the blank c8a547fff05dfcd_22 | fill in the blank c8a547fff05dfcd_23 | fill in the blank c8a547fff05dfcd_24% |
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. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit.
| 20Y6 Actual Units |
Percentage Increase (Decrease) |
20Y7 Budgeted Units (rounded) |
||
| 8" × 10" Frame: | ||||
| East | fill in the blank c8a547fff05dfcd_25 | fill in the blank c8a547fff05dfcd_26% | fill in the blank c8a547fff05dfcd_27 | |
| Central | fill in the blank c8a547fff05dfcd_28 | fill in the blank c8a547fff05dfcd_29% | fill in the blank c8a547fff05dfcd_30 | |
| West | fill in the blank c8a547fff05dfcd_31 | fill in the blank c8a547fff05dfcd_32% | fill in the blank c8a547fff05dfcd_33 | |
| 12" × 16" Frame: | ||||
| East | fill in the blank c8a547fff05dfcd_34 | fill in the blank c8a547fff05dfcd_35% | fill in the blank c8a547fff05dfcd_36 | |
| Central | fill in the blank c8a547fff05dfcd_37 | fill in the blank c8a547fff05dfcd_38% | fill in the blank c8a547fff05dfcd_39 | |
| West | fill in the blank c8a547fff05dfcd_40 | fill in the blank c8a547fff05dfcd_41% | fill in the blank c8a547fff05dfcd_42 |
Question Content Area
3. Prepare a sales budget for the year ending December 31, 20Y7.
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
| 8" × 10" Frame: | |||
| East | fill in the blank 3e3be3fe8fd703a_1 | $fill in the blank 3e3be3fe8fd703a_2 | $fill in the blank 3e3be3fe8fd703a_3 |
| Central | fill in the blank 3e3be3fe8fd703a_4 | fill in the blank 3e3be3fe8fd703a_5 | fill in the blank 3e3be3fe8fd703a_6 |
| West | fill in the blank 3e3be3fe8fd703a_7 | fill in the blank 3e3be3fe8fd703a_8 | fill in the blank 3e3be3fe8fd703a_9 |
| Total | fill in the blank 3e3be3fe8fd703a_10 | $fill in the blank 3e3be3fe8fd703a_11 | |
| 12" × 16" Frame: | |||
| East | fill in the blank 3e3be3fe8fd703a_12 | $fill in the blank 3e3be3fe8fd703a_13 | $fill in the blank 3e3be3fe8fd703a_14 |
| Central | fill in the blank 3e3be3fe8fd703a_15 | fill in the blank 3e3be3fe8fd703a_16 | fill in the blank 3e3be3fe8fd703a_17 |
| West | fill in the blank 3e3be3fe8fd703a_18 | fill in the blank 3e3be3fe8fd703a_19 | fill in the blank 3e3be3fe8fd703a_20 |
| Total | fill in the blank 3e3be3fe8fd703a_21 | $fill in the blank 3e3be3fe8fd703a_22 | |
| Total revenue from sales | $fill in the blank 3e3be3fe8fd703a_23 |
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