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	284		91
Desired inventory (units), June 30	327		79
Expected sales volume (units):
Midwest Region	3,550		4,000
South Region	5,800		6,550
Unit sales price	$135		$210

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
Total
Total units to be produced

Answer 1

a. Prepare a sales budget.

	Unit Sales Volume	Unit Selling price	Total Sales
Model Rumble:
East region	3,550	135	479,250
West region	5,800	135	783,000
Total			1,262,250
Model Thunder:
East region	4,000	210	840,000
West region	6,550	210	1,375,500
Total			2,215,500
Total revenue from sales			3,477,750

b. Prepare a production budget.

	Units Model Rumble	Units Model Thunder
Expected units to be sold	9,350	10,550
Add: Desired ending inventory	327	79
Total units required	9,677	10,629
Less: Beginning inventory	(284)	(91)
Total units to be produced	9,393	10,538