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School Days Furniture, Inc., manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school systems throughout the mid-west. The controller of the company's Desk Division is currently preparing a budget for the third quarter of the year. The following sales forecast has been made by the division's sales manager. July August September 10,000 desk-and-chair sets 12,000 desk-and-chair sets 15,000 desk-and-chair sets Each desk-and-chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $40. Pine planks cost $.60 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 $21.00 per hour for direct-labor wages and fringe benefits. 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. A. Sales budget (10 points): August September Sales (in sets). Sales price per set Sales revenue. July 10,000 $40 $400,000 B. Production budget (in sets) (10 points): August September 3,000 Sales. Add: Desired ending inventory. Total requirements .... Less: Projected beginning inventory. Planned production ...... July 10,000 2,400 12,400 2,000 10,400 C. Raw material purchases (10 points): July August September Planned production (sets). 10,400 Raw material required per set (board feet) 10 Raw material required for production (board feet) ..... 104,000 Add: Desired ending inventory of RM (board feet)...... 12,600 16,000 Total requirements 116,600 Less: Projected beginning inventory of RM (board feet) 10,400 Planned purchases of raw material (board feet). 106,200 $.60 Cost per board foot Planned purchases of raw material (dollars).. $ 63,720 D. Direct-labor budget (10 points): August September X Planned production (sets)........ Direct-labor hours per set........ Direct-labor hours required. Cost per hour Planned direct-labor cost.. July 10,400 1.5 15,600 $21 $327,600 X