Chapter 21, Problem 21.1APR

Forecast sales volume and sales budget

For 2016, Raphael Frame Company prepared the .sales budget that follows.

At the end of December 2016, 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

For the year ending December 31, 2017, unit sales are expected to follow die patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $17 and die unit selling price for die 12" × 16" frame is expected to increase to $32, effective January 1, 2017.

Instructions

1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, over budget. Place your answers in a columnar table with the following format:

	Unit Sales, Year Ended 2016	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 2017, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2017. 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.

2016 Actual Units

Percentage Increase (Decrease)

2017 Budgeted Units (rounded)

3. Prepare a sales budget for the year ending December 31, 2017.