Part #3

You will need to submit a budget report to the CEO, including an explanation of the utility of master budgets. You will also submit a variance report that shows how the company is performing versus budgeted amounts. Use the following data.

Amount of Goods Sold Per Quarter:

	Q1	Q2	Q3	Q4
Chairs sold per quarter	1150	1200	1250	1400
Tables sold per quarter	900	950	1000	1150
Dressers sold per quarter	650	700	750	900

Target Sales Goal Per Quarter:

Goods	Quantity
Chairs	1300
Tables	1100
Dressers	800

Q1 beginning inventory:

Goods	Quantity
Chairs	120
Tables	90
Dressers	70

Assume that the material and labor costs from Part 1 are standards. Compare those standard costs to the actual amounts listed below. These are the actual amounts used for the entire fiscal year:

Actual amount of wood purchased and used	46,120 bd. ft.
Actual cost of wood purchased and used	$80,028
Actual amount of direct labor hours	17,900
Actual cost of direct labor	$275,550

Within your analysis, make sure to include the following:

• Create variance reports for Q1, Q2, Q3, and Q4 against the Quarterly Budget.
• Generate a quarterly budget for the upcoming year that includes sales, production, materials and labor budgets. Assume a 10% increase in sales.
• Explain how a master budget can be a useful tool in aligning a company's operations to its long-term goals.
• Discuss how a variance report can be used to direct management toward production issues.

Your explanations of master budgets and variance reports should be 500 to 750 words in length.