Graham Inc. produces three different types of chairs: an outdoor chair, an office chair, and a kitchen chair. The outdoor chairs are made entirely of plastic. The office chairs have a plastic base and are covered in leather. The kitchen chairs are made out of wood with a leather seat. As the controller, you are expected to prepare Graham 's operating budget for January of 2021. Here is Graham's balance sheet as of 12/31/2020:

Cash	12100
AR	9000
DM	810875
FG Inven	1090225
Land	8000
Buidling and E	70000
Accumlate Depreciation	(29200)
Total Asset	1971000
AP	2580
Captial stock	17500
Retail Earning	1950920
Stock holders Equity	1971000

The Outdoor Chairs are expected to sell for $220 each, the Office Chairs are expected to sell for $600 each, and the Kitchen Chairs are expected to sell for $755 each.

1. For each product, Graham plans to have ending finished goods inventory (in units) for each month that equals 25% of the next month sales (in units). Finished Goods inventory on 12/31/2020 consists of 970 Outdoor Chairs at a cost of $180 per unit, 750 Office Chairs at a cost of $550 per unit, and 805 Kitchen Chairs at a cost of $625 per unit. Graham uses FIFO to account for its finished goods inventory.

   1. 	Outdoor Chain	office chair	Kitchen chair
      Jan	2700	4700	4400
      Feb	2600	5200	4100
      Mar	3000	6400	3600

2. Graham uses plastic, leather, and wood to make its chairs. Each Outdoor Chair requires 25 pounds of plastic. Each Office Chair requires15 pounds of plastic and 21 square feet of leather. Each Kitchen Chair requires 9 square feet of leather and 42 board feet of wood. The company expects to pay $2.25 per pound of plastic, $10.95 per square foot of leather, and $8.00 per board foot of wood.
3. Direct Materials (DM) inventory on 12/31/2020 consists of 38,900 pounds of plastic at a cost of $1.75 per pound, 37,300 square feet of leather at a cost of $15.00 per square foot, and 28,200 board feet of wood at a cost of $6.50 per board foot. The target ending DM inventory (in units) for each material is budgeted to be 20% of the amount of material required to be used in production that month (e.g., the total pounds of plastic required to be used in production in a given month x 20% = the target ending inventory for plastic in that month). Graham uses FIFO to account for its DM inventory.
4. Each Outdoor Chair requires 5 hours of direct labor, each Office Chair requires 3.5 hours of direct labor, and each Kitchen Chair requires 4 hours of direct labor. The direct labor rate is expected to be $14 per hour. All of the products are made in batches of 70 units. Each batch of Outdoor Chairs requires 1.5 setup hours. Each batch of Office Chairs requires 3 setup hours. Each batch of Kitchen Chairs requires 2 setup hours. Each Outdoor Chair requires 4 machine hours, each Office Chair requires 6 machine hours, and each Kitchen Chair requires 7 machine hours.

   1. Cost pool	Rate
      Set up	455 hour
      Machine	12
      Assembly	8 per labor
      Packaging	5 per chair

5. Variable selling and administrative costs are $10.50 per unit sold. Fixed selling and administrative costs are $467,000 per month

Prepare a complete operating budget for Graham Inc. for the month of January 2021. This should include all of the following schedules: - revenues budget

• production budget (in units)
• direct materials usage budget (in units and dollars)
• direct materials purchases budget (in units and dollars)
• direct labor cost budget
• manufacturing overhead cost budget
• the budget of the ending finished goods inventory unit cost
• ending inventories budget
• cost of goods sold budget
• nonmanufacturing costs budget
• budgeted income statement for the month