Allen, Inc., manufactures 6 models of molded plastic waste containers. It is now early 2001, and Allen's budgeting team is finalizing the sales budget for 2001. Sales in units and dol¬ lars for 2000 were as follow:

In looking over the 2000 sales figures, Allen's sales budgeting team recalled the following:

a. Model W-1 costs were rising faster than the price could rise. Preparatory to phasing out this model, Allen, Inc., planned to slash advertising for this model and raise its price by 50%. The number of units of Model W-1 to be sold were forecast to be 20% of 2000 units.

b. Models W-5 and W-6 were introduced on November 1, 2000. They are brightly colored, heavy-duty wheeled garbage containers designed for household use. Allen estimates that demand for both models will continue at the 2000 rate.

c. A competitor has announced plans to introduce an improved version of Model W-3. Allen believes that the Model W-3 price must be cut 20% to maintain unit sales at the 2000 level.

d. It was assumed that unit sales of all other models would increase by 10%, prices re¬
maining constant.
Required:
Prepare a sales forecast by product and in total for Allen, Inc., for 2001.

Transcribed Image Text:

Model Number Sold Price Revenue W-1 14,000 $ 9 $126,000 W-2 15,000 W-3 21,000 W-4 13,500 W-5 2,000 W-6 1,000 12022 15 225,000 13 273,000 135,000 44,000 26 26,000 $829,000