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	750		300
Desired inventory (units), June 30	500		250
Expected sales volume (units):
Midwest Region	12,000		3,500
South Region	14,000		4,000
Unit sales price	$60		$90

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.

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 units available
Estimated inventory, June 1
Total units to be produced

Answer 1

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	12000	$60	$720000
South Region	14000	60	840000
Total			$1560000
Model: Thunder
Midwest Region	3500	$90	$315000
South Region	4000	90	360000
Total			$675000
Total revenue from sales			$2235000

Feedback

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

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	26000	7500
Desired inventory, June 30	500	250
Total units available	26500	7750
Estimated inventory, June 1	-750	-300
Total units to be produced	25750	7450