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	253		70
Desired inventory (units), September 30	291		61
Expected sales volume (units):
East Region	3,500		3,900
West Region	4,800		4,200
Unit sales price	$100		$225

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

--Requirement '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	3,500	$100	$350,000
West Region	4,800	$100	$480,000
Total	8,300		$830,000
Model XL:
East Region	3,900	$225	$877,500
West Region	4,200	$225	$945,000
Total	8,100		$1,822,500
Total revenue from sales			$2,652,500

--Requirment 'b'

Harmony Audio Company
Production Budget
For the Month Ending September 30, 2016
	Units Model DL	Units Model XL
Expected units to be sold	8,300	8,100
Plus desired inventory, September 30, 2016	291	61
Total	8,591	8,161
Less estimated inventory, September 1, 2016	253	70
Total units to be produced	8,338	8,091