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		79
Desired inventory (units), June 30	312		69
Expected sales volume (units):
East Region	3,550		3,100
West Region	5,350		6,050
Unit sales price	$115		$185

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			$

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
Total units required
Total units to be produced

Answer 1

Ans:

Ans:

Ans. 1	Sonic Inc.
	Sales Budget
	For the Month Ending June 30
	Product and Area	Unit Sales Volume (a)	Unit Selling Price (b)	Total Sales (a*b)
	Model Rumble:
	East Region	3550	$ 115	$ 408,250
	West Region	5350	$ 115	$ 615,250
	Total	8900		$ 1,023,500
	Model Thunder:
	East Region	3100	$ 185	$ 573,500
	West Region	6050	$ 185	$ 1,119,250
	Total	9150		$ 1,692,750
	Total revenue from sales			$ 2,716,250
Ans. 2	Sonic Inc.
	Production Budget
	For the Month Ending June 30
	Particulars	Model Rumble	Model Thunder
	Expected units to be sold	8900	9150
	Add: Desired ending finished inventory	312	69
	Total required units	9212	9219
	Less: Beginning finished inventory units	-271	-79
	Units to be produced	8941	9140

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