Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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-Gos 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 37,000 85 3,145,000
A-3 53,000 90 4,770,000
A-4 14,000 140 1,960,000
A-5 3,500 240 840,000
$11,665,000

In looking over the last year's sales figures, Audio-2-Gos sales budgeting team recalled the following:

  1. 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.
  2. 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.
  3. 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.
  4. 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 10 percent to maintain unit sales at last year's level.
  5. It was assumed that unit sales of all other models would increase by 10 percent, prices remaining constant.

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 Units Price Total Sales
A-1 fill in the blank $fill in the blank $fill in the blank
A-2 fill in the blank fill in the blank fill in the blank
A-3 fill in the blank fill in the blank fill in the blank
A-4 fill in the blank fill in the blank fill in the blank
A-5 fill in the blank fill in the blank fill in the blank
A-6 fill in the blank fill in the blank fill in the blank
Total $fill in the blank

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Security Audit And Control Features SAP ERP

Authors: Deloitte Touche Tohmatsu Research Team And Isaca

3rd Edition

1604201150, 978-1604201154

More Books

Students also viewed these Accounting questions

Question

Evaluate three pros and three cons of e-prescribing

Answered: 1 week ago