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	274		81
Desired inventory (units), June 30	315		70
Expected sales volume (units):
East Region	3,250		2,850
West Region	5,750		6,500
Unit sales price	$100		$195

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:
East Region		$	$
West Region
Total			$
Model Thunder:
East Region		$	$
West Region
Total			$
Total revenue from sales			$

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b. Prepare a production budget.

Sonic Inc.
Production Budget
For the Month Ending June 30
	Units Model Rumble	Units Model Thunder
Expected units to be sold
Less estimated inventory, June 1 Plus desired inventory, June 30
Total units required
Less estimated inventory, June 1 Plus desired inventory, June 30
Total units to be produced

Answer 1

Answer a:

Sales Budget
Product and area	Unit sales volume	Unit selling price	Total sales
Model Rumble:
East Region	3,250	$                            100	$    325,000
West Region	5,750	$                            100	$    575,000
Total	9,000		$    900,000
Model Thunder:
East Region	2,850	$                            195	$    555,750
West Region	6,500	$                            195	$ 1,267,500
Total	9,350		$ 1,823,250
Total revenue from sales			$ 2,723,250

Answer b:

Production Budget
	Units Model Rumble	Units Model Thunder
Expected units to be sold	9,000	9,350
Plus desired inventory, June 30	315	70
Total units required	9,315	9,420
Less estimated inventory, June 1	274	81
Total units to be produced	9,041	9,339

In case of any doubt, please feel free to comment.