Preparation of sales budget

Reference no: EM1319658

Remembrant Frame Company prepared the following sales budget for the current year:

Remembrant Frame Company

Sales Budget

For the Year Ending December 31, 2008

Product and Areas	Unit Sales Volume	Unit Selling Price	Total Sales
8″ x 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″ x 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″ x 10″ Frame	12″ x 16″ 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″ x 10″ frame is expected to change to $12, and the unit selling price for the 12″ x 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:

	Unit Sales, Year Ended 2008		Increase (Decrease) Actual Over Budget
	Budget	Actual Sales	Amount	Percent
8″ x 10″ Frame:
East...............
Central............
West...............
12″ x 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 answer in a columnar table similar to that in part (1) above but with the following column heads. Round budgeted units to be nearest unit.

2008 Actual Units	Percentage Increase (Decrease)	2009 Budgeted Units (rounded)

3. Prepare a sales budget for the year ending December 31, 2009.

Reference no: EM1319658

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