Forecast sales volume and sales budget

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

Renoir Frame Company

Sales Budget

For the year ending Dec. 31, 2003

Product and Area Unit Sales Unit Selling Total Sales

Volume Price

8”X10” Frame:

East……………… $25,000 $8.00 $200,000

Central……………… 32,000 8.00 256,000

West…………………12,000 8.00 96,000

Total………………69,000 $552,000

12”X16” Frame

East……………… $20,000 $15.00 $300,000

Central……………… 25,000 15.00 375,000

West…………………10,000 15.00 150,000

Total………………55,000 $825,000

Total revenue form sales…… ………… 1,377,000

At the end of Dec. 2003, the following units sales data were reported
for the year:

Unit Sales

8’X10” Frames 12”X16” Frame

East 26,125 20,600

Central 32,640 26,375

West 11,448 9,500

For the year ending Dec. 31, 2004 unit sales are expected to follow the
patterns established during the year ending Dec. 31, 2003. The unit
selling price for the 8”X10” frame is expected to change to $9, and
the unit selling price for the 12”X16” frame is expected to decline
to $13, effective Jan. 1, 2004.

Instruction:

Compute the increase or decrease of actual unit sales for the year ended
Dec. 31, 2003, over budget. Place answers in a columnar table with the
following format:

Increase (Decrease)

Unit Sales, Year Ended 2003 Actual Over Budget

Budget Actual Sales Amount Percent

8”X10” Frame:

East………………

Central………………

West…………………

12”X16” Frame

East………………

Central………………

West…………………

(There are more problems on page two)

Assuming that the trend of sales indicated in (1) is to continue in
2004, compute the unit sales volume to be used for preparing the sales
budget for the year ending Dec.31, 2004. Place your answers in a
columnar table with the following format. Round budgeted units to the
nearest thousand.

2003 Actual Units Percentage Increase (Decrease) 2004 Budgeted Units

8”X10” Frame:

East………………

Central………………

West……………



12”X16” Frame

East……………

Central…………

West……………

3. Prepare a sales budget for the year ending Dec. 31, 2004