Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units that are sold to public school systems throughout the Midwest. The controller of the company’s Desk Division is currently preparing a budget for the second quarter of the year. The following sales forecast has been made by the division’s sales manager.

Each desk-and-chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $50. Pine planks cost $.50 per board foot, and the division ends each month with enough wood to cover 10 percent of the next month’s production requirements. The division incurs a cost of $20 per hour for direct-labor wages and fringe benefits. The division ends each month with enough finished-goods inventory to cover 20 percent of the next month’s sales.
Required: Complete the following budget schedules.

1. Sales budget:

2. Production budget (in sets):

3. Raw-material purchases:

4. Direct-labor budget:

5. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements.
Show how the solution will change if the following information changes: each set sells for $55 and the direct-labor cost per hour is $21.

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April 10,000 desk-and-chair sets May 12,000 desk-and-chair sets June 15,000 desk-and-chair sets