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		82
Desired inventory (units), June 30	336		71
Expected sales volume (units):
Midwest Region	4,400		4,950
South Region	5,200		4,500
Unit sales price	$100		$205

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	4,400	$100	$440,000
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) Prepare sales budget :

Product and Area	Units sales volume	Units selling price	Total Sales
Model: Rumble
Midwest region	4400	100	440000
South region	5200	100	520000
Total			960000
Model: Thunder
Midwest region	4950	205	1014750
South region	4500	205	922500
Total			1937250
Total Sales			2897250

Production budget

	Units rumble	Units thunder
Sales unit	9600	9450
Add: Desired ending inventory	336	71
Total	9936	9521
Less; Beginning inventory	-292	-82
Total units to be produced	9644	9439