Budgeting Systems for Management AccountingWarren / Reeve / DuchacProblem 21-1B solution |
Forecast sales volume and sales budget
Van Gogh Frame Company prepared the following sales budget for the current year:
At the end of December 2010, the following unit sales data were reported for the year:
For the year ending December 31, 2011, unit sales are expected to follow the patterns established during the year ending December 31, 2010. The unit selling price for the 8'' x 10'' frame is expected to increase to $16, and the unit selling price for the 12'' x 16'' frame is expected to increase to $26, effective January 1, 2011.
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2010, over budget. Use the minus sign to indicate decreases for amounts and percents.
2. Assuming that the trend of sales indicated in part (1) is to continue in 2011, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2011. Use the minus sign to indicate any percentage decreases.
3. Prepare a sales budget for the year ending December 31, 2011.
