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

Executive desks. 0.91 m X 1.5 m oak desks = 1.365 m2 Chairperson desks. 1.8 m X 1.2 m red oak desks = 2.16 m2 The budgeted direct-cost inputs for each product in 2008 are as follows:

Executive Line Chairperson Line Direct materials:

Oak top Red oak top Oak legs Red oak legs —

Direct manufacturing labour 3 hours 1.5 square metres 4 legs 2.3 square metres 4 legs 5 hours Unit data pertaining to the direct materials for March 2008 are as follows:

Actual Beginning Direct Materials Inventory

(March 1,2008)

Product Executive Line Chairperson Line Oak top Red oak top Oak legs Red oak legs 29.8 square metres 100 legs 13.9 square metres 40 legs Target Ending Direct Materials Inventory

(March 31,2008)

Product Executive Line Chairperson Line Oak top Red oak top Oak legs Red oak legs 17.9 square metres 80 legs 18.6 square metres 44 legs Unit cost data for direct-cost inputs pertaining to February 2008 and March 2008 are February 2008

(Actual)

March 2008

(Budgeted)

Oak top (per square metre) $21.60 $24.00 Red oak top (per square metre) 27.60 30.00 Oak legs (per leg) 13.20 14.40 Red oak legs (per leg) 20.40 21.60 Manufacturing labour cost per hour 36.00 36.00 Manufacturing overhead (both variable and fixed) is allocated to each desk based on budgeted direct manufacturing labour-hours per desk. The budgeted variable manufacturing overhead rate for March 2008 is $42 per direct manufacturing labour-hour. The budgeted fixed manufacturing overhead for March 2008 is $51,000. Both variable and fixed manufac¬

turing overhead costs are allocated to each unit offinished goods.

Data relating to finished goods inventory for March 2008 are Executive Line Chairperson Line 230 CHAPTER 6 Beginning inventory Beginning inventory in dollars (cost)

Budgeted ending inventory 20 units

$12,576 30 units 5 units

$5,820 15 units Budgeted sales for March 2008 are 740 units ofthe Executive Line and 390 units ofthe Chairperson Line. The budgeted selling prices per unit in March 2008 are $1,224 for an Executive Line desk and $1,920 for a Chairperson Line desk.
Assume the following in your answer:

a. Work-in-process inventories are negligible and ignored.

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

c. Unit costs of direct materials purchased and finished goods are constant in March 2008.

d. Budgeted beginning finished goods inventory: Executive Line = 20; Chairperson Line = 5.

e. Budgeted ending finished goods inventory: Executive Line = 30; Chairperson Line =15.
Required Prepare the following budgets for March 2008:
1. Revenue budget 2. Production budget in units 3. Direct materials usage budget and direct materials purchases budget 4. Direct manufacturing labour budget 5. Manufacturing overhead budget 6. Ending inventory budget 7. Cost of goods sold budget and gross margin calculation