Question

Sales and Production Budgets

Ultimate Audio Company manufactures two models of speakers, U500 and S1000. Based on the following production and sales data for June.

	U500		S1000
Estimated inventory (units), June 1	284		83
Desired inventory (units), June 30	327		72
Expected sales volume (units):
Northeast Region	3,800		3,350
Southwest Region	5,550		6,250
Unit sales price	$110		$215

a. Prepare a sales budget. Enter all amounts as positive numbers.

ULTIMATE AUDIO COMPANY
Sales Budget
For the Month Ending June 30
Product and Area	Unit Sales Volume	Unit Sales Price	Total Sales
Model U500:
Northeast Region		$	$
Southwest Region
Total			$
Model S1000:
Northeast Region		$	$
Southwest Region
Total			$
Total revenue from sales			$

b. Prepare a production budget. Enter all amounts as positive numbers.

ULTIMATE AUDIO COMPANY
Production Budget
For the Month Ending June 30
	Model U500	Model S1000
Expected units to be sold
Total
Total units to be produced

Answer 1

Ultimate Audio Company manufactures two models of speakers, U500 and S1000. Based on the following production and sales data for June.

	U500	S1000
Estimated inventory (units), June 1	284	83
Desired inventory (units), June 30	327	72
Expected sales volume (units):
Northeast Region	3,800	3,350
Southwest Region	5,550	6,250
Unit sales price	$110	$215

.

a. Prepare a sales budget. Enter all amounts as positive numbers.

.

ULTIMATE AUDIO COMPANY
Sales Budget
For the Month Ending June 30
Product and Area	Unit Sales Volume	Unit Sales Price	Total Sales
Model U500:
Northeast Region	3800	$110	$418000
Southwest Region	5550	110	610500
Total	9350	110	$1028500
Model S1000:
Northeast Region	3350	$215	$720250
Southwest Region	6250	215	1343750
Total	9600	215	$2064000
Total revenue from sales			$3092500

.

b. Prepare a production budget. Enter all amounts as positive numbers.

.

Total units to be produced = Expected sales + Desired ending inventory - Beginning inventory

.

ULTIMATE AUDIO COMPANY
Production Budget
For the Month Ending June 30
.	Model U500	Model S1000
Expected units to be sold:	9350	9600
Add: Desired ending Inventory	327	72
Total	9677	9672
Less: Beginning Inventory	284	83
Total units to be produced	9393	9589