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	292		85
Desired inventory (units), June 30	336		74
Expected sales volume (units):
East Region	4,300		3,800
West Region	5,300		6,000
Unit sales price	$105		$195

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			$

Feedback

Once sales quantities are estimated, the expected sales revenue can be determined.

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
Plus desired inventory, June 30
Total units required
Less estimated inventory, June 1
Total units to be produced

Answer 1

1)

sales Budget for the month ending June 30
product and area	Unit sales volume	unit selling price	Total sales
Model Rumble
East region	4300	105	451500
west region	5300	105	556500
Total	9600	105	1008000
Model Thunder
Eat region	3800	195	741000
west region	6000	195	1170000
Total	9800	195	1911000
Total revenue from sales			2919000

2)

Production Budget
for the month ending june 30
	Model Rumble	Model Thunder
Expected units to be sold	9600	9800
Plus desired inventory june 30	336	74
Total units required	9936	9874
Less estimated inventory, June 1	(292)	(85)
Total units to be produced	9644	9789