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	292		81
Desired inventory (units), September 30	336		70
Expected sales volume (units):
East Region	3,850		4,300
West Region	5,750		5,000
Unit sales price	$145		$195

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

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	3850	145	558250
West Region	5750	145	833750
Total	9600		1392000
Model XL:
East Region	4300	195	838500
West Region	5000	195	975000
Total	9300		1813500
Total revenue from sales			3205500
b
Harmony Audio Company
Production Budget
For the Month Ending September 30, 2016
	Units Model DL	Units Model XL
Expected units to be sold	9600	9300
Plus desired inventory, September 30, 2016	336	70
Total	9936	9370
Less estimated inventory, September 1, 2016	292	81
Total units to be produced	9644	9289