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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

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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:
King610 units at $780 per unit
Prince750 units at $550 per unit
Southern Domestic:
King340 units at $780 per unit
Prince440 units at $550 per unit
International:
King360 units at $850 per unit
Prince290 units at $600 per unit

b. Estimated inventories at February 1:

Direct materials:
Fabric420 sq. yds.
Wood580 linear ft.
Filler250 cu. ft.
Springs660 units
Finished products:
King90 units
Prince25 units

c. Desired inventories at February 28:

Direct materials:
Fabric390 sq. yds.
Wood650 linear ft.
Filler300 cu. ft.
Springs540 units
Finished products:
King80 units
Prince35 units

d. Direct materials used in production:

In manufacture of King:
Fabric6.0 sq. yds. per unit of product
Wood38 linear ft. per unit of product
Filler4.2 cu. ft. per unit of product
Springs16 units per unit of product
In manufacture of Prince:
Fabric4.0 sq. yds. per unit of product
Wood26 linear ft. per unit of product
Filler3.4 cu. ft. per unit of product
Springs12 units per unit of product

e. Anticipated purchase price for direct materials:

Fabric$12.00per sq. yd.
Wood7.00per linear ft.
Filler$3.00per cu. ft.
Springs4.50per unit

f. Direct labor requirements:

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1. Prepare a sales budget for February. Royal Furniture Company Sales Budget For the Month Ending February 28 Unit Sales Unit Selling Product and Area Total Sales Volume Price King : Northern Domestic Southern Domestic International Total to Prince: Northern Domestic Southern Domestic International Total Total revenue from sales to2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

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