Question

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	244		78
Desired inventory (units), June 30	280		68
Expected sales volume (units):
East Region	2,600		2,900
West Region	5,400		6,100
Unit sales price	$140		$200

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
Plus desired inventory, June 30
Total units required
Less estimated inventory, June 1
Total units to be produced

Answer 1

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	2600	$140	$364,000
	West Region	5400	$140	$756,000
	Total	8000		$1,120,000
	Model Thunder:
	East Region	2900	$200	$580,000
	West Region	6100	$200	$1,220,000
	Total	9000		$1,800,000
	Total revenue from sales			$2,920,000
Ans. 2	Sonic Inc.
	Production Budget
	For the Month Ending June 30
	Particulars	Model Rumble	Model Thunder
	Expected units to be sold	8000	9000
	Add: Desired ending finished inventory	280	68
	Total required units	8280	9068
	Less: Beginning finished inventory units	-244	-78
	Units to be produced	8036	8990