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	276		68
Desired inventory (units), June 30	317		59
Expected sales volume (units):
Midwest Region	3,850		3,400
South Region	5,200		4,500
Unit sales price	$145		$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			$

Feedback

Once sales quantities are estimated, the expected sales revenue can be determined.

Learning Objective 4.

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

Feedback

Remember to take into account expected units to be sold plus desired units in ending inventory less estimated units in beginning inventory when calculating total units to be produced.

Learning Objective 4.

Feedback

Answer 1

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	3,850	145	558,250
	South Region	5,200	145	754,000
	TOTAL	9,050		1,312,250
	Model : Thunder
	Midwest Region	3,400	225	765,000
	South Region	4,500	225	1,012,500
	TOTAL	7,900		1,777,500
	Total revenue from sales			3,089,750
b	Production budget
	Sonic Inc.
	Production budget
	For the month ending June 30
		Units Rumble	Units Thunder
	Expected units to be sold	9,050	7,900
	Add: Desired Inventory , June 30	317	59
	Total	9,367	7,959
	Less: Estimated inventory, June 1	(276)	(68)
	Total units to be produced	9,091	7,891