Coronado Furniture builds high-end hand-made dining tables. Attacus Simmons, the company's owner, has developed the following sales forecast for 2022. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Forecasted sales (tables) 2,600 3,000 2,800 1,900 Because of the time needed to create each table, Coronado maintains an ending Finished Goods Inventory of 20% of the following quarter's budgeted sales. Coronado has been following this inventory policy for several years. The company ended 2021 with 450 tables on hand. The standard cost card for a table is as follows: Standard Quantity Standard Price Total Standard Cost American cherry wood 20 board feet $ 4/board foot $ 80 American cherry turning square (legs) 4 squares $ 8/square 32 Direct labor 8 DLH $ 15/DLH 120 Variable overhead 8 DLH $ 45/DLH 360 Fixed overhead 8 DLH $ 12/DLH 96 TA $ 688 (a) Prepare Coronado's production budget for 2022. Assume that the desired ending inventory for 2022 is 500 tables. Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Budgeted unit sales 2,600 3,000 2,800 1,900 10,300 Budgeted ending inventory 600 560 380 500 500 Total units required 3,200 3,560 3,180 2,400 10,800 Beginning inventory 450 600 560 380 450 Budgeted Production 2.750 2.960 2.620 2.020 10.350 (b) Coronado maintains inventory of American cherry wood equal to 10% of the following quarter's production needs. On December 31, 2021, Coronado's physical inventory count showed 4,800 board feet of American cherry. Due to an anticipated price increase in 2023, managers want to have 5,000 board feet of American cherry wood in inventory on December 31, 2022. Prepare Coronado's 2022 direct materials purchases budget for American cherry wood. Direct Materials Purchases Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Budgeted production 2,750 2,960 2,620 2,020 10,350 Standard board feet 20 20 20 20 20 Production needs 55,000 59,200 52,400 40,400 207,000 Budgeted ending inventory 5.920 5.240 4.040 5.000 5,000 Total DM required 60,920 64,440 56,440 45,400 212,000 Beginning inventory 4.800 5.920 5,240 4,040 4.800 Budgeted purchases 56,120 58,520 51,200 41,360 207,200 Standard price per board foot $4 $4 $4 $4 $4 Budgeted purchases cost $224.480 $234,080 $204,800 $165.440 $828.800 (c) Prepare Coronado's direct labor budget for 2022. 1st Quarter Direct Labor Budget 2nd Quarter 3rd Quarter 2,960 2,620 Annual 4th Quarter 2,020 2,750 10,350 8 8 8 8 8 Budgeted production Standard DLH per unit Total DLH required Standard wage rate Budgeted DL cost 22,000 23,680 20,960 16.160 82,800 $15 $15 $15 $15 $15 $330.000 $355,200 $314.400 $242.400 $1.242.000 (d) Assume that because of the skill level required to make the tables, Coronado cannot easily hire additional workers to handle peaks in demand. Consequently, the company maintains a steady workforce of 40 employees and guarantees each worker 500 hours per quarter. For any additional time required to complete the scheduled production, these same workers earn 1.5 times their normal hourly rate. Prepare Coronado's direct labor budget for 2022. (Round overtime rate to 2 decimal place, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.) Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual DLH needed DLH available Overtime hours Overtime rate $ $ $ $ $ Overtime cost $ $ Regular hours cost Budgeted DL cost $ $ $ $ $ $ $ $ $
