Question 1: (40 points) 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 6,000 desk-and-chair sets August 7,000 desk-and-chair sets September 8,500 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 $60. Pine planks cost $0.60 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 6,000 $60 $360,000 B. Production budget (in sets) (10 points): August September July 6,000 1,400 7,400 1,200 Sales...... Add: Desired ending inventory Total requirements. Less: Projected beginning inventory... Planned production 1,500 6.200 C. Raw material purchases (10 points): July August September 6,200 X 10 62,000 7,300 8,000 Planned production (sets) Raw material required per set (board feet) Raw material required for production (board feet.... Add: Desired ending inventory of RM (board feet)..... Total requirements... Less: Projected beginning inventory of RM (board feet) Planned purchases of raw material (board feet). Cost per board foot.. Planned purchases of raw material (dollars). 69,300 6,200 63,100 X $0.60 _37,860 D. Direct-labor budget (10 points): August September July 6,200 1.5 Planned production (sets).. Direct-labor hours per set... Direct-labor hours required Cost per hour. Planned direct-labor cost.. 9,300 $21 $195.300