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	265		66
Desired inventory (units), September 30	305		57
Expected sales volume (units):
East Region	3,650		3,200
West Region	5,050		4,400
Unit sales price	$130		$200

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	3650	130	474500
West Region	5050	130	656500
Total			1131000
Model XL:
East Region	3200	200	640000
West Region	4400	200	880000
Total			1520000
Total revenue from sales			2651000
b
Harmony Audio Company
Production Budget
For the Month Ending September 30, 2016
	Units Model DL	Units Model XL
Expected units to be sold	8700	7600
Plus desired inventory, September 30, 2016	305	57
Total	9005	7657
Less estimated inventory, September 1, 2016	265	66
Total units to be produced	8740	7591