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.

Wood

7.00

per linear ft.

Filler

$3.00

per cu. ft.

Springs

4.50

per unit

f. Direct labor requirements:

King:

Framing Department

1.2 hrs. at $12 per hr.

Cutting Department

0.5 hr. at $14 per hr.

Upholstery Department

0.8 hr. at $15 per hr.

Prince:

Framing Department

1.0 hr. at $12 per hr.

Cutting Department

0.4 hr. at $14 per hr.

Upholstery Department

0.6 hr. at $15 per hr.

Direct materials variances The following data is provided for Bellingham Company: DATA Resources' requirements, standard pounds per un 2.3 Resources' standard price, per pound $3.30 Units produced 16,000 Resources used for production, pounds 36,200 Resources' actual price per pound $3.50 Using formulas and cell references, perform the required analysis, and input your answers into the green cells in the Amount column. Select the corresponding type of variance in the dropdowns in cells D15:017. Transfer the numeric results for the green entry cells (C15:C17) into the appropriate fields in CNOWV2 for grading. Amount Formulas a. Direct materials price variance b. Direct materials quantity variance c. Direct materials cost variance D E F 1 2 Direct labor variances 4 5 3 3 The following data is provided for Bellingham Company DATA 6 Standard direct labor hours per unit Standard hourly rate $20.00 Units produced 15,600 9 Actual labor hours used 62,900 10 Actual hourly rate $19.25 7 8 11 Using formulas and cell references, perform the required analysis, and input your answers into the green cells in the Amount column. Select the corresponding type of variance in the dropdowns in cells D15D17. Transfer the numeric results for the green entry cells (C15:C17) into the appropriate 12 fields in CNOWV2 for grading. 13 14 Amount Formulas 15 a. Direct labor rate variance 16 b. Direct labor time variance 17 c. Direct labor cost variance 18 19 20 21 22 Royal Furniture Company Sales Budget For the Month Ending February 28 Unit Sales Product and Area Volume Unit Selling Price Total Sales King Northern Domestic Southern Domestic International Total Northern Domestic Southern Dames 5 International Total Total run from a 2. Prepare a production budget for February. For those in which you must subtracted or negative numbers a mission Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince 3. Prepare a dire material purchases budget for February. For those in which you must enter subtracted orative numbers use a misin. Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Fabric (sq. yds.) Wood [linear fl.) Direct Materials Filler (cu. FL.) Springs (units) Total Required units for production King Price Desd inventory, February 28 Total Estimated inventory, February 1 Total units to be purchased unt prics B2EE 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 Department Department Upholstery Department Total Hours required for production King Prince Total Hourly rate E Total de labor cost Check My Work