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	251		72
Desired inventory (units), June 30	289		63
Expected sales volume (units):
Midwest Region	3,450		3,050
South Region	4,800		5,400
Unit sales price	$110		$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
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) Sales budget :

Product and Area	Unit sale volume	Unit selling price	Sales revenue
Model: Rumble
Midwest Region	3450	110	379500
South Region	4800	110	528000
Total			907500
Model: Thunder
Midwest Region	3050	185	564250
South Region	5400	185	999000
Total			1563250
Total revenue from sales			2470750

b) Production budget :

	Unit rumble	Units thunder
Unit sales	8250	8450
Add: Desired ending inventory	289	63
Total	8539	8513
Less: Beginning inventory	-251	-72
Total units to be produced	8288	8441