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Prepare a sales forecast by product and in total for Audio-2-Go, Inc., for this year. Audio-2-Go, Inc. Sales Budget For This Year Model Price Total Sales A-1 A-2 A-3 A-4 A-5 A-6 Total Units

Prepare a sales forecast by product and in total for Audio-2-Go, Inc., for this year. Audio-2-Go, Inc. Sales Budget For This Year Model Price Total Sales A-1 A-2 A-3 A-4 A-5 A-6 Total Units

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Required: Prepare a sales forecast by product and in total for Audio-2-Go, Inc., for this year. Audio-2-Go, Inc. Sales Budget For This Year Model Price Total Sales A-1 A-2 A-3 A-4 A-5 A-6 Total Units 1000
Transcribed Image Text:Required: Prepare a sales forecast by product and in total for Audio-2-Go, Inc., for this year. Audio-2-Go, Inc. Sales Budget For This Year Model Price Total Sales A-1 A-2 A-3 A-4 A-5 A-6 Total Units 1000
Sales Forecast and Budget Audio-2-Go, Inc., manufactures MP3 players. Models A-1, A-2, and A-3 are small and light. They are attached to armbands and use flash memory. Models A-4 and A-5 are somewhat larger and use a built-in hard drive; they can be put into fanny packs for use while working out. It is now early January, and Audio-2-Go's budgeting team is finalizing the sales budget for this year. Sales in units and dollars for last year were as follows: Model Number Sold Price Revenue A-1 19,000 $ 50 $950,000 A-2 30,000 80 2,400,000 A-3 56,000 110 6,160,000 A-4 12,000 140 1,680,000 A-5 2,500 230 575,000 $11,765,000 In looking over the last year's sales figures, Audio-2-Go's sales budgeting team recalled the following: a. Model A-1 costs were rising faster than the price could rise. Preparatory to phasing out this model, Audio-2-Go, Inc., planned to slash advertising for this model and raise its price by 20 percent. The number of units of Model A-1 to be sold was forecast to be 50 percent of last year's units. b. Model A-5 was introduced on November 1 of last year. It contains a built-in 20 GB hard drive and can be synchronized with several popular music software programs. Audio-2-Go brought out this model to match competitors' audio players, but the price is so much higher than other Audio-2-Go products, that sales have been disappointing. The company plans to discontinue this model on June 30 of this year, and thinks that monthly sales will remain at last year's level if the sales price remains unchanged. c. Audio-2-Go plans to introduce Model A-6 on July 1 of this year. It will be a high-end player that will be lighter and more versatile than Model A-5 (which it will replace). The target price for this model is $190; unit sales are estimated to equal 4,000 per month. d. A competitor has announced plans to introduce an improved version of Model A-3. Audio-2-Go believes that the Model A-3 price must be cut 15 percent to maintain unit sales at last year's level. e. It was assumed that unit sales of all other models would increase by 10 percent, prices remaining constant.
Transcribed Image Text:Sales Forecast and Budget Audio-2-Go, Inc., manufactures MP3 players. Models A-1, A-2, and A-3 are small and light. They are attached to armbands and use flash memory. Models A-4 and A-5 are somewhat larger and use a built-in hard drive; they can be put into fanny packs for use while working out. It is now early January, and Audio-2-Go's budgeting team is finalizing the sales budget for this year. Sales in units and dollars for last year were as follows: Model Number Sold Price Revenue A-1 19,000 $ 50 $950,000 A-2 30,000 80 2,400,000 A-3 56,000 110 6,160,000 A-4 12,000 140 1,680,000 A-5 2,500 230 575,000 $11,765,000 In looking over the last year's sales figures, Audio-2-Go's sales budgeting team recalled the following: a. Model A-1 costs were rising faster than the price could rise. Preparatory to phasing out this model, Audio-2-Go, Inc., planned to slash advertising for this model and raise its price by 20 percent. The number of units of Model A-1 to be sold was forecast to be 50 percent of last year's units. b. Model A-5 was introduced on November 1 of last year. It contains a built-in 20 GB hard drive and can be synchronized with several popular music software programs. Audio-2-Go brought out this model to match competitors' audio players, but the price is so much higher than other Audio-2-Go products, that sales have been disappointing. The company plans to discontinue this model on June 30 of this year, and thinks that monthly sales will remain at last year's level if the sales price remains unchanged. c. Audio-2-Go plans to introduce Model A-6 on July 1 of this year. It will be a high-end player that will be lighter and more versatile than Model A-5 (which it will replace). The target price for this model is $190; unit sales are estimated to equal 4,000 per month. d. A competitor has announced plans to introduce an improved version of Model A-3. Audio-2-Go believes that the Model A-3 price must be cut 15 percent to maintain unit sales at last year's level. e. It was assumed that unit sales of all other models would increase by 10 percent, prices remaining constant.
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