Budget Problem Part A

The ABC company manufactures bookcases that sell for $400. Budgeted sales for first months are as follows:

Month

Budgeted Sales (units)

January

1000

February

1500

March

2500

April

2000

Required

Calculate sales budget in $ for each month and total the first quarter

Part B

Each bookcase requires 30 square feetof oak at a cost of $10 per sq foot.. the company wants to maintain an inventory of bookcases equal to 10% of the following month,s sales. Inventory on Jan 1 consisted of 80 bookcases

REQUIRED

Prepare a production budgets in units for each month and in total for the first quarter

Part C

The company wants to amintin an inventory of oak equal to 20% of the next months requirements. Materials inventory on Jan 1 consisted of 1100 sq feet of oak

The company estimates an inventory of oak on hand at the end of March of approximately 8000 sq feet

Required

Prepare purchases budget in $ for Direct materials for each month and in total for first quarter

Part D

Each bookcase requires 5 hr of DLH at a cost of $8.00 per hour. Variable manufacturing overhead is budgeted at $2 per DLH

Monthly fixed overhead consists of the following :

Supervisors salaries

$6000

Insurance

$ 2000

Depreciation of equipment

$500

Depreciation of factory

$10000

REQUIRED

1. Prepare a direct labour budget for each month and

total the quarter

2. Prepare a monthly manufacturing overhead budget and

total the quarter