please explain
idget 5} Iction, Juno: labor cost, Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units that are sold to public school systems throughout the Midwest. The controller of the company's Desk Division is cur- rently preparing a budget for the second quarter of the year. The following sales forecast has been made by the division's sales manager. April 10,000 deskandchair sets Mav .............................................................................. 12,000 desk-and-chairsets June ............................................................................. 15,000 deskandchair sets Each desk-aud-chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $50. Pine planks cost $.50 per board foot, and the division ends each month with enough wood to cover 10 percent of the next month's production requirements. The division incurs a cost of $20 per hour for direct-labor wages and fringe benets. The division ends each month with enough finished-goods inventory to cover 20 percent of the next month's sales. Required: Complete the following budget schedules. 1. Sales budget: April May June Sales {in sets} 10000 Sales price per set ________________________________________________________________ x$50 Sales revenue ________________________________________________________________________ $500,000 2. Production budget (in sets): April May June Sales ______________________________________________________________________________________ 10000 Add: Desired ending inventory ............................................. 3,000 Total requirements ___________________ 12,400 Less: Projected beginning inventory .................................... Planned production ............................................................... w 3. Raw-material purchases: April May June Planned production {sets} 10,400 Raw material required per set [board feet] __________________________ X 10 Raw material required for production [board feet} 104,000 Add: Desired ending inventory of raw material, in board feet {10% of next month's requirement] 12,600 16,000 Total requirements 116,600 Less: Projected beginning inventory of raw material, in board feett10% of current month's requirement] 10,400 Planned purchases of raw material [board feet] 106,200 Cost per board foot X$.50 Planned purchases of raw material (dollars) m 4. Direct-labor budget: April Mattr June Planned production {sets} _____________________________________________________ 10,400 Directlabor hours per set X1.5 Direct-labor hours required 15.600 Cost per hour _________________________________________________________________________ x$20 Planned directlabor cost ______________________________________________________ $312,000 5. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following information changes: each set sells for $55 and the directlabor cost per hour is $21
