SALES BUDGET Norton Inc. manufactures six models of leaf blowers and weed eaters. Norton’s budgeting team is finalizing the sales budget for the coming year. Sales in units and dollars for last year follow:

Product Number Sold Price ($) Revenue LB-1 16,800 29 $ 487,200 LB-2 18,000 15 270,000 WE-6 25,200 13 327,600 WE-7 16,200 10 162,000 WE-8 2,400 22 52,800 WE-9 1,000 26 26,000 Total $1,325,600 In looking over the previous year’s sales figures, Norton’s sales budgeting team recalled the following:

a. Model LB-1 is a newer version of the leaf blower with a gasoline engine. The LB-1 is mounted on wheels instead of being carried. This model is designed for the commercial market and did better than expected in its first year. As a result, the number of units of Model LB-1 to be sold was forecast at 300 percent of the previous year’s units.

b. Models WE-8 and WE-9 were introduced on October 1 of last year. They are lighter versions of the traditional weed eater and are designed for smaller households or condo units. Norton estimates that demand for both models will continue at the previous year’s rate.

c. A competitor has announced plans to introduce an improved version of model WE-6, Norton’s traditional weed eater. Norton believes that the model WE-6 price must be cut 20 percent to maintain unit sales at the previous year’s level.

d. It was assumed that unit sales of all other models would increase by 10 percent, prices remaining constant.

Required:

Prepare a sales budget by product and in total for Norton Inc. for the coming year.

Exercise