Question 1: 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 7,000 desk-and-chair sets August 9,000 desk-and-chair sets September 12,000 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 July August September 7,000 Sales (in sets). Sales price per set.. Sales revenue.. 40 280000 B. Production budget (in sets) August July 7,000 September 1,800 3,000 8,800 Sales... Add: Desired ending inventory. Total requirements Less: Projected beginning inventory. Planned production 2,000 6.800 C. Raw material purchases July August September Planned production (sets) 6,800 Raw material required per set (board feet) 10 Raw material required for production (board feet)..... 68,000 Add: Desired ending inventory of RM (board feet)...... 9,600 16,000 Total requirements.. 77,600 Less: Projected beginning inventory of RM (board feet) 6,800 Planned purchases of raw material (board feet). 70,800 Cost per board foot. 0.6 Planned purchases of raw material (dollars).. 42,480 D. Direct-labor budget August September July 6,800 1.5 Planned production (sets). Direct-labor hours per set.. Direct-labor hours required... Cost per hour..... 10,200 21 Planned direct-labor cost. 214,200