ABC Company's actual unit sales in the current year for January, February, and March was 16,100, 13,100, and 19,100 units, respectively. Current year selling price is $40. An analysis of general economic trends and specific initiatives at ABC forecasts increases for the coming budget year: sales volume by 10% and sales price by 5%.

Required:

Prepare ABC Company's budgeted unit sales and total sales volume for the first quarter of the coming year.

Budgeted units sales=53,130 unit sales

total sales volume=53,130*42=$2,231,460

Explanation:

Step 1

Determine the forecasted units for January, February and March as follows;

January forecasted units sales=initial units+increase in unit sales

where;

initial units=16,100

increase in unit sales=10% of 16,100 = (10/100) * 16,100=1,610

replacing;

January forecasted units sales = (16,100+1,610) = 17,710 units

February forecasted units sales=initial units+increase in unit sales

where;

initial units=13,100

increase in unit sales=10% of 13,100 = (10/100) * 13,100=1,310

replacing;

February forecasted units sales = (13,100+1,310) = 14,410 units

March forecasted units sales=initial units+increase in unit sales

where;

initial units=19,100

increase in unit sales=10% of 19,100 = (10/100) * 19,100=1,910

replacing;

February forecasted units sales = (19,100+1,910) = 21,010 units

Forecasted price per unit=Initial price+increase in price

where;

initial price=$40

increase in price = (5/100) * 40=$2

replacing;

forecasted price per unit=40+2=$42

Budgeted units sales = (17,710+14,410+21,010) = 53,130 unit sales

Total sales volume=unit sales*price per unit

total sales volume=53,130*42=$2,231,460