Question

Forecast Sales Volume and Sales Budget

Guardian Framing Inc. prepared the following sales budget for 2016:

Guardian Framing Inc. Sales Budget For the Year Ending December 31, 2016
Product and Area		Unit Sales Volume		Unit Selling Price		Total Sales
8" × 10" Frame:
East		27,600		$24		$662,400
Central		6,600		24		158,400
West		6,100		24		146,400
Total		40,300				$967,200
12" × 16" Frame:
East		9,100		$25		$227,500
Central		2,200		25		55,000
West		1,500		25		37,500
Total		12,800				$320,000
Total revenue from sales						$1,287,200

At the end of December 2016, the following unit sales data were reported for the year:

	Unit Sales
	8" × 10"		12" × 16"
East	28,428		9,464
Central	6,666		2,156
West	5,856		1,545

For the year ending December 31, 2017, unit sales are expected to follow the patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $25 and the unit selling price for the 12" × 16" frame is expected to increase to $27, effective January 1, 2017.

Required:

1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, 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 2016				Increase (Decrease) Actual Over Budget
		Budget		Actual Sales		Difference	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. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit.

		2016 Actual Units		Percentage Increase (Decrease)	2017 Budgeted Units (rounded)
8" × 10" Frame:
	East			%
	Central			%
	West			%
12" × 16" Frame:
	East			%
	Central			%
	West			%

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

Guardian Framing Inc.
Sales Budget
For the Year Ending December 31, 2017
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
8" × 10" Frame:
East		$	$
Central
West
Total			$
12" × 16" Frame:
East		$	$
Central
West
Total			$
Total revenue from sales			$

Answer 1

1.

			Unit sales, Year ended 2016			Increase/(Decrease) actual over budget
			Budget Sales	Actual Sales		Difference	Percent
8" x 10" Frame
East			27600	28428		828	3
Central			6600	6666		66	1
West			6100	5856		-244	-4
12" x 16" Frame
East			9100	9464		364	4
Central			2200	2156		-44	-2
West			1500	1545		45	3

2.

		2016 Actual Units			Percentage Increase (Decrease)			2017 Budgeted Units (rounded)
8" x 10" Frame
East		28428			3			29281
Central		6666			1			6733
West		5856			-4			5622
12" x 16" Frame
East		9464			4			9843
Central		2156			-2			2113
West		1545			3			1591

3.

Guardian Framing Inc.
Sales Budget
For the Year Ending December 31, 2017
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
8" × 10" Frame:
East	29281	$25	$732,025
Central	6733	$25	$168,325
West	5622	$25	$140,550
Total	41635		$1,040,900
12" × 16" Frame:
East	9843	$27	$265,761
Central	2113	$27	$57,051
West	1591	$27	$42,957
Total	13547		$365,769
Total revenue from sales			$1,406,669