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 monthand 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 Prepare a direct labour budget for each month and total the quarter Prepare a monthly manufacturing overhead budget and total the quarter