Question

#2

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	262		78
Desired inventory (units), June 30	301		68
Expected sales volume (units):
Midwest Region	2,950		2,600
South Region	5,650		6,400
Unit sales price	$100		$225

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			$

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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
Expected units to be sold
Desired inventory, June 30
Total
Estimated inventory, June 1
Total units to be produced

Answer 1

Solution a:

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	2950	$100.00	$295,000.00
South region	5650	$100.00	$565,000.00
Total	8600		$860,000.00
Model: Thunder
Midwest region	2600	$225.00	$585,000.00
South region	6400	$225.00	$1,440,000.00
Total	9000		$2,025,000.00
Total Revenue from Sales			$2,885,000.00

Solution b:

Sonic Inc.
Production Budget
For the month ending June 30
	Units Rumble	Units Thunder
Expected Units to be sold	8600	9000
Desired Inventory, June 30	301	68
Total	8901	9068
Estimated Inventory, June 1	262	78
Total units to be produced	8639	8990