Question

Harmony Audio Company manufactures two models of speakers, DL and XL. Based on the following production and sales data for September 2016, prepare (a) a sales budget and (b) a production budget.

	DL		XL
Estimated inventory (units), September 1	256		63
Desired inventory (units), September 30	294		55
Expected sales volume (units):
East Region	3,600		3,150
West Region	4,800		4,200
Unit sales price	$135		$215

a. Prepare a sales budget.

Harmony Audio Company
Sales Budget
For the Month Ending September 30, 2016
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
Model DL:
East Region		$	$
West Region
Total			$
Model XL:
East Region		$	$
West Region
Total			$
Total revenue from sales			$

Feedback

b. Prepare a production budget.

Harmony Audio Company
Production Budget
For the Month Ending September 30, 2016
	Units Model DL	Units Model XL
Expected units to be sold
Plus desired inventory, September 30, 2016
Total
Less estimated inventory, September 1, 2016
Total units to be produced

Answer 1

Harmony Audio Company
Sales Budget
For the Month Ending September 30, 2016
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
Model DL:
East Region	3,600	$135	$486,000
West Region	4,800	$135	$648,000
Total	8,400		$1,134,000
Model XL:
East Region	3,150	$215	$677,250
West Region	4,200	$215	$903,000
Total	7,350		$1,580,250
Total revenue from sales			$2,714,250

Harmony Audio Company
Production Budget
For the Month Ending September 30, 2016
	Units Model DL	Units Model XL
Expected units to be sold	8,400	7,350
Plus desired inventory, September 30, 2016	294	55
Total	8,694	7,405
Less estimated inventory, September 1, 2016	256	63
Total units to be produced	8,438	7,342