Q3: Problems:

Problem 1

Viola Enterprises is a manufacturer that produces violins for established professional musicians. Ed Johnson, the companys sales manager, prepared the following sales forecast for 2011:

Sales Price	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
$600	600	500	600	600

The sales price of violins is expected to increase by 6% per quarter to cover expected increases in raw material costs.

Required

Prepare Violas sales budget for 2011 for violins.

Problem 2

Viola Enterprises is a manufacturer that produces violins for amateur, rising, and established professional musicians. Ed Johnson, the companys sales manager, prepared the following sales forecast for violins for the four quarters of 2011 and the first quarter of 2012:

Sales Price	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	1st Quarter
$600	600	500	600	600	450

On December 31, 2010, Viola had 80 violins in stockfewer than the desired inventory level of 20% of the next quarters sales.

Required

Prepare Violas production budget for violins for 2011.

Problem 3

Viola Enterprises is a manufacturer that produces both violins and cellos for amateur, rising, and established professional musicians. Each cello requires a spruce top, which Viola purchases for $400 each. On December 31, 2010, Viola had 40spruce tops in inventory. Spoilage during the production process results in a standard quantity of 1.2spruce tops per cello. Viola wants to maintain an ending inventory of spruce tops equal to 20% of the following quarters production needs rounded to the nearest whole unit. The first quarter of 2012 has been budgeted at 140 cellos to be produced. Sales and production needs appear below:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Annual
Budgeted unit sales	200	80	100	120	500
Budgeted production	184	86	106	234	610

Required

Prepare the purchases budget for spruce tops for 2011.

Problem 4

Batmania, Inc plans to sell 1,195 baseball bats with production scheduled at 1,200 bats during July. Each bat requires 3 board feet of birch and 0.60 hours of direct labor. Birch costs $2.20 per board foot and employees of the company are paid $12.50 per hour. Batmania has 210 board feet of birch and 25 bats in beginning inventory, and plans to have 240 board of birch and 30 bats in ending inventory for the month.

Required

Calculate budgeted direct labor for July.