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	278		76
Desired inventory (units), September 30	319		66
Expected sales volume (units):
East Region	3,600		4,050
West Region	5,500		4,800
Unit sales price	$145		$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			$

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

1) Sales Budget
Product and Area		Unit Sales Volume		Unit Sale Price		Total Sale
Model DL
East Region		3600		$ 145.00		$     522,000.00
West Region		5500		$ 145.00		$     797,500.00
Total		9100				$ 1,319,500.00
Model XL
East Region		4050		$ 215.00		$     870,750.00
West Region		4800		$ 215.00		$ 1,032,000.00
Total		8850				$ 1,902,750.00
Total Revenue from Sales						$ 3,222,250.00
2) Production Budget
				Unit Model DL		Unit Model XL
Expected Unit to be sold				9100		8850
Plus desired inventory September 30 2012				319		66
Total				9419		8916
Less estimated inventory sept 1 2012				-278		76
Total unit to be produced				9141		8992