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 1 750 300 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.

Answer 1

Answer: please see explanation column

Step-by-step explanation:

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) Sonic Inc. Sales Budget for June

Unit Sales Vol Unit Selling price Total Sales

Model Rumble:

Midwest Region 12000 60 $720,000

South Region 14000 60 $840,000

Total 1,560,000

Model Thunder:

Midwest Region 3500 $90 $315,000

South Region 4000 $90 $360,000

Total $675,000

Total revenue from sales 1,560,000 + $675,000 =$2,235,000

B) Sonic Inc. Production budget for June

Units Model Rumble Units Model Thunder

Expected units to be sold 26000 7500

Add: Desired ending inventory + 500 + 250

Total units required 26500 7750

Less: Beginning inventory - 750 - 300

Total units to be produced $25750 $ 7450

Calculation :

Expected units to be sold =12,000 + 14,000 = $26,000

3,500 + 4,000 = $7,500

Total units required=Expected units to be sold+ Desired ending inventory

26000 +500 =$26,500

7,500 +250= $7,750