Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Royal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for February is summarized as follows: a. Estimated sales of King and Prince chairs for February by sales territory: Northern Domestic: King 610 units at $780 per unit Prince 750 units at $550 per unit Southern Domestic: King 340 units at $780 per unit Prince 440 units at $550 per unit International: King 360 units at $850 per unit Prince 290 units at $600 per unit b. Estimated inventories at February 1: Direct materials: Fabric 420 sq yds. Wood 580 linear ft. Filler 250 cu. ft. Springs 660 units Finished products: King 90 units Prince 25 units c. Desired inventories at February 28: Direct materials: Fabric 390 sq yds. Wood 650 linear ft. Filler 300 cu. ft. Springs 540 units Finished products: King 80 units Prince 35 units d. Direct materials used in production: In manufacture of King: Fabric 6.0 sq yds. per unit of product Wood 38 linear ft. per unit of product Filler 4.2 cu. ft. per unit of product Springs 16 units per unit of product In manufacture of Prince: Fabric 4.0 sq. yds. per unit of product Wood 26 linear ft. per unit of product Filler 3.4 cu. ft. per unit of product Springs 12 units per unit of product e. Anticipated purchase price for direct materials: Fabric $12.00 per sq. yd. 7.00 per linear ft. Wood Filler $3.00 per cu. ft. Springs 4.50 per unit f. Direct labor requirements: King: Framing Department Cutting Department. 1.2 hrs. at $12 per hr. 0.5 hr. at $14 per hr. 0.8 hr. at $15 per hr. Upholstery Department Prince: Framing Department 1.0 hr. at $12 per hr. Cutting Department. 0.4 hr. at $14 per hr. 0.6 hr. at $15 per hr. Upholstery Department Required: 1. Prepare a sales budget for February. Royal Furniture Company Sales Budget For the Month Ending February 28 Unit Sales Unit Selling Volume Price Product and Area Total Sales King: Northern Domestic $ $ Southern Domestic International Total Prince: Northern Domestic $ $ Southern Domestic International Total $ Total revenue from sales $ 2. Prepare a production budget for February. Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince Expected units to be sold Plus desired inventory, February 28 Total units required Less estimated inventory, February 1 Total units to be produced 3. Prepare direct materials purchases budget for February. Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Direct Materials Fabric Filler Wood (linear ft.) Springs (units) Total (sq. yds.) (cu. ft.) Required units for production: King Prince Plus desired inventory, February 28 Total units required Less estimated inventory, February 1 Total units to be purchased Unit price $ $ $ $ Total direct materials to be purchased $ $ $ $ 4. Prepare a direct labor cost budget for February. Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 Framing Cutting Upholstery Department Department Department Total Hours required for production: King Prince Total hours required Hourly rate $ Total direct labor cost $ $ $ $
