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Video-Forward, Inc., designs and manufactures wearable video cameras. Models A-1, A- 2, and A-3 are lightweight video cameras that can be used on arms and
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Video-Forward, Inc., designs and manufactures wearable video cameras. Models A-1, A- 2, and A-3 are lightweight video cameras that can be used on arms and headbands. Models A-4 and A-5 have larger memory, better resolution, and more Wi-Fi-related features. It is now early January and Video-Forward's budgeting team is finalizing the sales budget for this year. Sales in units and in dollars for last year were as follows: Model Number Sold Price Revenue A-1 22,000 $60 $1,320,000 A-2 30,000 75 2,250,000 4-3 35,000 100 5,500,000 A-4 10,000 1,300,000 A-5 3,000 720,000 $11,090,000 In looking over the last year's sales figures, Video-Forward'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, Video-Forward, Inc., planned to slash advertising for this model and raise its price by 30 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. Video-Forward brought out this model to match competitors' video cameras, but the price is so much higher than other Video-Forward 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. Video-Forward 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 $175; unit sales are estimated to equal 3,000 per month. d. A competitor has announced plans to introduce an improved version of Model A-3. Video-Forward believes that the Model A-3 price must be cut 10 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. Required: Prepare a sales forecast by product and in total for Video-Forward, Inc., for this year. Video-Forward, Inc. Sales Budget For This Year Price Total Sales Model Units 4-1 A-2 4-3 A-4 A-S A-6 Total Sales Forecast and Budget Video-Forward, Inc., designs and manufactures wearable video cameras. Models A-1, A-2, and A-3 are lightweight video cameras that can be used on arms and headbands. Models A-4 and A-5 have larger memory, better resolution, and more Wi- Fi-related features. It is now early January and Video-Forward's budgeting team is finalizing the sales budget for this year. Sales in units and in dollars for last year were as follows: Price $ 60 Model Number Sold Revenue A-1 22,000 $1,320,000 A-2 30,000 75 2,250,000 A-3 55,000 100 5,500,000 A-4 10,000 130 1,300,000 A-5 3,000 240 720,000 $11,090,000 In looking over the last year's sales figures, Video-Forward'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, Video-Forward, Inc., planned to slash advertising for this model and raise its price by 30 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. Video-Forward brought out this model to match competitors' video cameras, but the price is so much higher than other Video-Forward 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. Video-Forward 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 $175; unit sales are estimated to equal 3,000 per month. d. A competitor has announced plans to introduce an improved version of Model A-3. Video-Forward believes that the Model A-3 price must be cut 10 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. Required: Prepare a sales forecast by product and in total for Video-Forward, Inc., for this year. Video-Forward, Inc. Sales Budget For This Year Model Units A-1 A-2 A-3 A-4 A-5 A-6 Total Price Total Sales
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