Answer:
a. Sales budget
Product and Area Unit Sales Volume Unit Selling Price Total
Model Rumble:
Midwest Region 3,450 100 $345,000
South Region 5,300 100 $530,000
Total $875,000
Model Thunder
Midwest Region 3,050 185 $564,250
South Region 6,000 185 $1,110,000
Total $1,674,250
Total Revenue from sales $2,549,250
b. Production budget
Units Model Rumble Units Model Thunder
Expected units to be sold 8,750 9,050
Total Units Required 9,056 9,118
Total Units to be Produced 8,790 9,040
Expected units Rumble = 3,450 + 5,300 = 8,750
Expected units Thunder = 3,050 + 6,000 = 9,050
Total Units required Rumble = 8,750 + 306 (desired inventory) = 9,056
Total Units required Thunder = 9,050 + 68 (desired inventory) = 9,118
Total units to be produced Rumble = 9,056 - 266(opening inventory)= 8,790
Total units to be produced Thunder = 9,118 - 78 (opening inventory) = 9,040
