Question

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 1 254 82 Desired inventory (units), June 30 292 71 Expected sales volume (units): Midwest Region 3,500 3,900 South Region 4,850 5,500 Unit sales price $135 $220 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 $ 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 units available Total units to be produced Check My Work

Answer 1

Sales budget and production budget are part of master budget.

sales budget

	unit sales volume	unit selling price	Total sales
model: Rumble
Midwest region	3500	$135	$472,500[$135*3500]
South region	4850	$135	$654,750[$135*4,850]
Total	8,350[3500+4850]		$1,127,250 [$472,500+654,750]
Model:Thunder
Midwest region	3900	$220	$858,000[$220*3,900]
South region	5500	$220	$1,210,000[$220*5500]
Total	9,400		$2,068,000 [$858,000+1,210,000]
Total Revenue from sales			$3,195,250[$1,127,250+2,068,000]

2) production Budget

	Units model-Rumble	Units model-Thunder
Expected units to be sold	8,350	9,400
Add: desired ending inventory	292	71
Total units required	8,642(292+8350]	9,471[9400+71]
Less: Beginning ending inventory	254	82
Total units to be produced	8,388[8642-254]	9,389[9471-82]

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