Question

Sales and Production Budgets

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	298		86
Desired inventory (units), September 30	343		75
Expected sales volume (units):
East Region	4,000		3,500
West Region	5,800		6,550
Unit sales price	$130		$190

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			$

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

a
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	4000	130	520000
West Region	5800	130	754000
Total			1274000
Model XL:
East Region	3500	190	665000
West Region	6550	190	1244500
Total			1909500
Total revenue from sales			3183500
b
Harmony Audio Company
Production Budget
For the Month Ending September 30, 2016
	Units Model DL	Units Model XL
Expected units to be sold	9800	10050
Plus desired inventory, September 30, 2016	343	75
Total	10143	10125
Less estimated inventory, September 1, 2016	298	86
Total units to be produced	9845	10039