Budget schedules for a manufacturer. Sierra Furniture is an elite desk manufacturer. It makes two products:

Executive desks'3' ?? 5' oak desks

Chairman desks'6' ?? 4' red oak desks

The budgeted direct-cost inputs for each product in 2009 are:

Unit data pertaining to the direct materials for March 2009 are:

Unit cost data for direct-cost inputs pertaining to February 2009 and March 2009 are:

1anufacturing overhead (both variable and fixed) is allocated to each desk on the basis of budgeted direct manufacturing labor-hours per desk. The budgeted variable manufacturing overhead rate for March 2009 is S35 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2009 is 342,500. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods.

Data relating to finished goods inventory for March 2009 are:

Budgeted sales for March 2009 are 740 units of the executive line and 390 units of the chairman line. The budgeted selling prices per unit in March 2009 are $1,020 for the executive-line desk and $1,600 for the chairman-line desk. Assume the following in your answer:

Work-in-process inventories are negligible and ignored.

Direct materials inventory and finished goods inventory are costed using the FIFO method.

Unit costs of direct materials purchased and finished goods are constant in March 2009.

1. Prepare the following budgets for March 2009:

a. Revenues budget

b. Production budget in units

c. Direct material usage budget and direct material purchases budget

d. Direct manufacturing labor budget

e. Manufacturing overhead budget

f. Ending inventories budget (direct materials and finished goods)

g. Cost of goods sold budget.

2. Suppose Sierra Furniture decides to incorporate continuous improvement into its budgeting process. Describe two areas where Sierra could incorporate continuous improvement into the budget schedules in requirement 1.

Transcribed Image Text:

Executive Line 16 square feet Chairman Line Oak top Red oak top Oak legs Red oak legs Direct manufacturing labor 25 square feet 3 hours 5 hours