Question
Q: The production supervisor wants to purchase new production equipment for April 20X9. The goal is to replace the labor-intensive production system. Please Explain executive
- Q: The production supervisor wants to purchase new production equipment for April 20X9. The goal is to replace the labor-intensive production system. Please Explain executive team: why new production equipment could affect the production and purchases budgets.
COMPANY
Sales Budget
For the Month Ending February 28, 20X9
Product and Area Unit Sales Volume Unit Salling Price Total Sales
King
Midwest Region 680 $820 $557,600
Southern Region 390 $820 $319,800
International Region 420 $870 $365,400
Total 1,490 $1,242,800
Queen
Midwest Region 850 $540 $459,000
Southern Region 480 $540 $259,200
International Region 330 $600 $198,000
Total 1 ,660 $916,200
Total revenue from sales $2,159,000
COMPANY
Production Budget
For the Month Ending February 28, 20X9
King Queen
Expected units to be sold 1,490 1,660
Plus desired inventory, Feb 28, 20X9 95 40
Total 1,585 1,700
Less estimated inventory, Feb 1, 20X9 105 35
Total units to be produced 1,480 1,665
COMPANY Direct Materials Purchases Budget
For the Month Ending February 28, 20X9
Direct Materials
Fabric (sq.yds.) Wood (linear ft.) Filler (cu. Ft.) Springs (units) Total
Required units for production:
King 6.5 42 4.6 18
Total units required 9,620 62,160 6,808 26,640 105,228
Queen 4.5 30 3.8 14
Total units required 7492.5 49,950 6,327 23,310 87079.5
Plus desired inventory, Feb 28, 20X9 430 680 350 660
Total 17,113 112,110 13,135 49,950 192,308
Less estimated inventory, Feb 1, 20X9 470 620 300 710
Total units to be purchased 16,643 111,490 12,835 49,240 190,208
Unit price 16 9.5 4.5 6.5
Total direct materials to be purchased 266,280 1,059,155 57,758 320,060 1,703,253
Less estimated inventory, Feb 1, 20X9 470 620 300 710
Total units to be purchased 16,643 111,490 12,835 49,240 190,208
Unit price 16 9.5 4.5 6.5
Total direct materials to be purchased 266,280 1,059,155 57,758 320,060 1,703,253
COMPANY
Direct Labor Cost Budget
For the Month Ending February 28, 20X9
Farming Dep Cutting Dep Upholstery Dep Total
Hours required production:
King 1,776 740 1,184 3,700
Queen 1,665 666 999 3,330
Total 3,441 1,406 2,183 7,030
Hourly rate $16 $19 $20
Total direct labor cost $55,056 $26,714 $43,660 $125,430
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Auditing A Practical Approach
Authors: Robyn Moroney
1st Canadian Edition
978-1118472972, 1118472977, 978-1742165943
