Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribed

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:

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 1

Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod Dick

7th Edition

1260306747, 978-1260306743

More Books

Students also viewed these Accounting questions

Question

Speak clearly and distinctly with moderate energy

Answered: 1 week ago

Question

Get married, do not wait for me

Answered: 1 week ago

Question

Do not pay him, wait until I come

Answered: 1 week ago