Question:
Rembrandt Frame Company prepared the following sales budget for the current year:
|
|
Unit Sales
|
Unit Selling
|
|
|
Product and Area
|
Volume
|
Price
|
Total Sales
|
|
8" × 10" Frame:
|
|
|
|
|
East
|
29,000
|
$14.00
|
$ 406,000
|
|
Central
|
22,000
|
14.00
|
308,000
|
|
West
|
31,500
|
14.00
|
441,000
|
|
Total
|
82,500
|
|
$1,155,000
|
|
12" × 16" Frame:
|
|
|
|
|
East
|
16,000
|
$24.00
|
$ 384,000
|
|
Central
|
10,500
|
24.00
|
252,000
|
|
West
|
15,000
|
24.00
|
360,000
|
|
Total
|
41,500
|
|
$ 996,000
|
|
Total revenue from sales
|
|
|
$2,151,000
|
At the end of December 2008, the following unit sales data were reported for the year:
|
|
Unit Sales
|
|
|
8" × 10"
|
12" × 16"
|
|
|
Frame
|
Frame
|
|
East
|
29,725
|
16,480
|
|
Central
|
22,770
|
10,710
|
|
West
|
30,240
|
14,325
|
For the year ending December 31, 2009, unit sales are expected to follow the patterns established during the year ending December 31, 2008. The unit selling price for the 8 × 10 × frame is expected to change to $12, and the unit selling price for the 12 × 16 × frame is expected to change to $21, effective January 1, 2009.
Instructions
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2008, over budget. Place your answers in a columnar table with the following format:
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|
Unit Sales,
|
Increase (Decrease)
|
|
|
Year Ended 2008
|
Actual Over Budget
|
|
|
Budget
|
Actual Sales
|
Amount
|
Percent
|
|
8" × 10" Frame:
|
|
|
|
|
|
East
|
|
|
|
|
|
Central
|
|
|
|
|
|
West
|
|
|
|
|
|
12" _ 16" Frame:
|
|
|
|
|
|
East
|
|
|
|
|
|
Central
|
|
|
|
|
|
West
|
|
|
|
|
2. Assuming that the trend of sales indicated in part (1) is to continue in 2009, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2009. Place your answers in a columnar table similar to that in part (1) above but with the following column heads. Round budgeted units to the nearest unit.
|
2008
|
Percentage
|
2009
|
|
Actual
|
Increase
|
Budgeted
|
|
Units
|
(Decrease)
|
Units (rounded)
|
3. Prepare a sales budget for the year ending December 31, 2009.