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	291		93
Desired inventory (units), June 30	334		81
Expected sales volume (units):
East Region	3,900		4,350
West Region	5,650		6,400
Unit sales price	$115		$190

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

Sales budget

	Unit Sales volume	Unit selling price	Total Sales
Model Rumble:
East Region	3900	115	448500
West Region	5650	115	649750
Total			1098250
Model Thunder
East Region	4350	190	826500
West Region	6400	190	1216000
Total			2042500
Total revenue from sales			3140750

Production budget

	Units Model Rumble	Units Model Thunder
Expected units to be sold	9550	10750
Desired ending inventory	334	81
Total units required	9884	10831
Less: Beginning inventory	-291	-93
Total units to be produced	9593	10738