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 1 230 62 Desired inventory (units), June 30 264 54 Expected sales volume (units): Midwest Region 2,700 3,000 South Region 4,850 4,200 Unit sales price $100 $210 a. Prepare a sales budget. Sonic Inc.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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 | 230 | 62 | |
| Desired inventory (units), June 30 | 264 | 54 | |
| Expected sales volume (units): | |||
| Midwest Region | 2,700 | 3,000 | |
| South Region | 4,850 | 4,200 | |
| Unit sales price | $100 | $210 |
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 | fill in the blank a0e081fc0f89004_1 | $fill in the blank a0e081fc0f89004_2 | $fill in the blank a0e081fc0f89004_3 |
| South Region | fill in the blank a0e081fc0f89004_4 | fill in the blank a0e081fc0f89004_5 | fill in the blank a0e081fc0f89004_6 |
| Total | fill in the blank a0e081fc0f89004_7 | $fill in the blank a0e081fc0f89004_8 | |
| Model: Thunder | |||
| Midwest Region | fill in the blank a0e081fc0f89004_9 | $fill in the blank a0e081fc0f89004_10 | $fill in the blank a0e081fc0f89004_11 |
| South Region | fill in the blank a0e081fc0f89004_12 | fill in the blank a0e081fc0f89004_13 | fill in the blank a0e081fc0f89004_14 |
| Total | fill in the blank a0e081fc0f89004_15 | $fill in the blank a0e081fc0f89004_16 | |
| Total revenue from sales | $fill in the blank a0e081fc0f89004_17 |
Once sales quantities are estimated, the expected sales revenue can be determined.
Learning Objective 4.
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 | fill in the blank aa3ef50d0fa9fc4_2 | fill in the blank aa3ef50d0fa9fc4_3 |
| Desired inventory, June 30 | fill in the blank aa3ef50d0fa9fc4_5 | fill in the blank aa3ef50d0fa9fc4_6 |
| Total | fill in the blank aa3ef50d0fa9fc4_7 | fill in the blank aa3ef50d0fa9fc4_8 |
| Estimated inventory, June 1 | fill in the blank aa3ef50d0fa9fc4_10 | fill in the blank aa3ef50d0fa9fc4_11 |
| Total units to be produced | fill in the blank aa3ef50d0fa9fc4_12 | fill in the blank aa3ef50d0fa9fc4_13 |
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