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	271		75
Desired inventory (units), June 30	312		65
Expected sales volume (units):
Midwest Region	3,650		4,100
South Region	5,250		4,550
Unit sales price	$140		$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			$

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

• Requirement ‘a’

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	3,650	$                140	$            511,000
South Region	5,250	$                140	$            735,000
Total	8,900	$                140	$         1,246,000
Model: Thunder
Midwest Region	4,100	$                225	$            922,500
South Region	4,550	$                225	$         1,023,750
Total	8,650	$                225	$         1,946,250
Total revenue from sales			$         3,192,250

• Requirement ‘b’

Sonic Inc.
Production Budget
For the Month Ending June 30
	Units Rumble	Units Thunder
Budgeted Sales unit	8900	8650
Desired ending Inventory 30 June	312	65
Total	9212	8715
Estimated beginning inventory	-271	-75
Total units to be produced	8941	8640