Question

1. 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	750		300
   Desired inventory (units), June 30	500		250
   Expected sales volume (units):
   East Region	12,000		3,500
   West Region	14,000		4,000
   Unit sales price	$160		$200

   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

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Answer 1

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	12000	$160	(12000*160)= $1920000
West Region	14000	160	(14000*160)= 2240000
Total	26000		$4160000
Model Thunder:
East Region	3500	$200	(3500*200)= $700000
West Region	4000	200	(4000*200)= 800000
Total	7500		$1500000
Total revenue from sales			(4160000+1500000)= $5660000

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	26000	7500
Add: Desired Ending inventory	500	250
Total units required	26500	7750
Less: Beginning inventory	(750)	(300)
Total units to be produced	25750	7450