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	248		68
Desired inventory (units), June 30	285		59
Expected sales volume (units):
Midwest Region	3,200		3,600
South Region	4,950		4,300
Unit sales price	$105		$225

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
Midwest Region		$	$
South Region
Total			$
Model: Thunder
Midwest Region		$	$
South Region
Total			$
Total revenue from sales			$

b. Prepare a production budget. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Sonic Inc.
Production Budget
For the Month Ending June 30
	Units Rumble	Units Thunder
Expected units to be sold
Desired inventory, June 30
Total units available
Estimated inventory, June 1
Total units to be produced

Answer 1

a)	Sales Budget
	Product and Area		Unit Sales Volume	Unit Selling Price	Total Sales
	Model: Rumble
	Midwest Region		3200	$ 105.00	$   3,36,000.00
	South Region		4950	$ 105.00	$   5,19,750.00
	Total				$   8,55,750.00
	Model: Thunder
	Midwest Region		3600	$ 225.00	$   8,10,000.00
	South Region		4300	$ 225.00	$   9,67,500.00
	Total				$ 17,77,500.00
	Total revenue from sales				$ 26,33,250.00

b)	Production Budget
				Units Rumble	Units Thunder
	Expected units to be sold			8150	7900
	Desired inventory, June 30			285	59
	Total units available			8435	7959
	Estimated inventory, June 1			-248	-68
	Total units to be produced			8187	7891