Classic Art Frame Company prepared the following sales budget for the current year:

At the end of December 2006, the following unit sales data were reported for the year:

For the year ending December 31, 2007, unit sales are expected to follow the patterns established during the year ending December 31, 2006. The unit selling price for the 8'' x 10'' frame is expected to change to $13, and the unit selling price for the 12'' x 16'' frame is expected to change to $22, effective January 1, 2007.

Instructions
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2006, over budget. Place your answers in a columnar table with the following format:

2. Assuming that the trend of sales indicated in (1) is to continue in 2007, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2007. Place your answers in a columnar table similar to that in (1) above but with the following column heads. Round budgeted units to the nearest unit.

3. Prepare a sales budget for the year ending December 31,2007.

Transcribed Image Text:

Classic Art Frame Company Sales Budget For the Year Ending December 31, 2006 Unit Sales Volume Unit Selling Price Product and Area Total Sales 8" x 10 Frame 28,000 $12.00 12.00 12.00 336,000 252,000 414,000 $1,002,000 ...34,500 83,500 12" × 16" Frame: $20.00 20.00 20.00 14,000 280,000 250,000 320,000 S 850,000 $1,852,000 16,000 Total revenue from sales._ . Unit Sales 8" × 10" Frame 12" × 16" Frame 6 East Central West 28,980 21,840 33,051 14,350 12,750 15,136 Increase (Decrease) Unit Sales, Year Ended 2006 Actu Over Budget Budget Actual Sales Amount Percent 8" x 10" Frame: Central West-... -... East West .-...- -.--.. -. 12" × 16" Frame: 2006 Actual Units Percentage Increase (Decrease) 2007 Budgeted Units (rounded)