Question

Sales and Production Budgets

Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget.

	Rumble		Thunder
Estimated inventory (units), June 1	282		69
Desired inventory (units), June 30	324		60
Expected sales volume (units):
East Region	3,550		3,100
West Region	5,700		4,950
Unit sales price	$145		$185

a. Prepare a sales budget.

Sonic Inc.
Sales Budget
For the Month Ending June 30
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
Model Rumble:
East Region		$	$
West Region
Total			$
Model Thunder:
East Region		$	$
West Region
Total			$
Total revenue from sales			$

b. Prepare a production budget.

Sonic Inc.
Production Budget
For the Month Ending June 30
	Units Model Rumble	Units Model Thunder
Expected units to be sold
Total units required
Total units to be produced

Answer 1

a
Sonic Inc.
Sales Budget
For the Month Ending June 30
Product and Area	Unit	Unit	Total
	Sales	Selling	Sales
	Volume	Price
Model Rumble:
East Region	3550	145	514750
West Region	5700	145	826500
Total			1341250
Model Thunder:
East Region	3100	185	573500
West Region	4950	185	915750
Total			1489250
Total revenue from sales			2830500
b
Sonic Inc.
Production Budget
For the Month Ending June 30
	Units Model Rumble	Units Model Thunder
Expected units to be sold	9250	8050
Plus desired inventory, June 30	324	60
Total units required	9574	8110
Less estimated inventory, June 1	282	69
Total units to be produced	9292	8041