Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Discount Furniture Pty Ltd manufactures a variety of desks, chairs, tables and shelf units which are sold to public school systems throughout Queensland. The

image text in transcribed

image text in transcribed

Discount Furniture Pty Ltd manufactures a variety of desks, chairs, tables and shelf units which are sold to public school systems throughout Queensland. The accountant of the companvs School Desk Division is currently preparing a budget for the first quarter of 2018. The following sales forecast has been made by the division's sales manager. January February March April 5,000 desk and chair sets 6,000 desk and chair sets 7,500 desk and chair sets 7,500 desk and chair sets Each desk and chair set requires 10 metres of pine planks and 1.5 hours of direct labour. Each set sells for $50. Pine planks cost $0.50 per metre and the division ends each month with enough wood to cover 10 per cent of the next month's production requirements. The division incurs a cost of $20.00 per hour for direct labour wages and fringe benefits. The division ends each month with enough finished goods inventory to cover 20 per cent of the next month's sales. Also, assume that April's production will total 8,000 units. Required: (15 marks in total) (a) Prepare the Production Budget for Discount Furniture Pty Ltd for January, February and March, using the information provided. (6 marks) (b) Prepare the Direct Materials Purchases Budget for January February, and March, using the information provided. (c) Outline three purposes of preparing budgets such as the Production and Direct Materials Purchases budgets considered here. Discount Furniture Pty Ltd manufactures a variety of desks, chairs, tables and shelf units which are sold to public school systems throughout Queensland. The accountant of the companvs School Desk Division is currently preparing a budget for the first quarter of 2018. The following sales forecast has been made by the division's sales manager. January February March April 5,000 desk and chair sets 6,000 desk and chair sets 7,500 desk and chair sets 7,500 desk and chair sets Each desk and chair set requires 10 metres of pine planks and 1.5 hours of direct labour. Each set sells for $50. Pine planks cost $0.50 per metre and the division ends each month with enough wood to cover 10 per cent of the next month's production requirements. The division incurs a cost of $20.00 per hour for direct labour wages and fringe benefits. The division ends each month with enough finished goods inventory to cover 20 per cent of the next month's sales. Also, assume that April's production will total 8,000 units. Required: (15 marks in total) (a) Prepare the Production Budget for Discount Furniture Pty Ltd for January, February and March, using the information provided. (6 marks) (b) Prepare the Direct Materials Purchases Budget for January February, and March, using the information provided. (c) Outline three purposes of preparing budgets such as the Production and Direct Materials Purchases budgets considered here.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Wendy M. Tietz, Louis Beaubien, Karen W. Braun

3rd Canadian edition

ISBN: 134460826, 134460820, 9780134524818 , 978-0134526270

More Books

Students also viewed these Accounting questions

Question

Consider the following four structures: (i) See Figure 9.23:

Answered: 1 week ago

Question

What does stickiest refer to in regard to social media

Answered: 1 week ago