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 unitSouthern Domestic: King340 units at $780 per unit Prince440 units at $550 per unitInternational: 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 unitsFinished products: King90 units Prince25 units

c. Desired inventories at February 28:

Direct materials: Fabric390 sq. yds. Wood650 linear ft. Filler300 cu. ft. Springs540 unitsFinished 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 productIn 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:

King: Framing Department1.2 hrs. at $12 per hr. Cutting Department0.5 hr. at $14 per hr. Upholstery Department0.8 hr. at $15 per hr.Prince: Framing Department1.0 hr. at $12 per hr. Cutting Department0.4 hr. at $14 per hr. Upholstery Department0.6 hr. at $15 per hr.

Required:

1. Prepare a sales budget for February.

Royal Furniture Company Sales Budget For the Month Ending February 28Product and AreaUnit Sales VolumeUnit Selling PriceTotal SalesKing: Northern Domesticfill in the blank 1$fill in the blank 2$fill in the blank 3 Southern Domesticfill in the blank 4fill in the blank 5fill in the blank 6 Internationalfill in the blank 7fill in the blank 8fill in the blank 9 Totalfill in the blank 10 $fill in the blank 11 Prince: Northern Domesticfill in the blank 12$fill in the blank 13$fill in the blank 14 Southern Domesticfill in the blank 15fill in the blank 16fill in the blank 17 Internationalfill in the blank 18fill in the blank 19fill in the blank 20 Totalfill in the blank 21 $fill in the blank 22Total revenue from sales $fill in the blank 23

2. 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 KingPrinceExpected units to be soldDesired inventory, February 28Total units availableEstimated inventory, February 1Total units to be producedfill in the blank 25fill in the blank 26Expected units to be soldDesired inventory, February 28Total units availableEstimated inventory, February 1Total units to be producedfill in the blank 28fill in the blank 29Expected units to be soldDesired inventory, February 28Total units availableEstimated inventory, February 1Total units to be producedfill in the blank 31fill in the blank 32Expected units to be soldDesired inventory, February 28Total units availableEstimated inventory, February 1Total units to be producedfill in the blank 34fill in the blank 35Expected units to be soldDesired inventory, February 28Total units availableEstimated inventory, February 1Total units to be producedfill in the blank 37fill in the blank 38

3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Direct Materials Fabric (sq. yds.) Wood (linear ft.) Filler (cu. ft.) Springs (units)TotalRequired units for production: King fill in the blank 39 fill in the blank 40 fill in the blank 41 fill in the blank 42 Prince fill in the blank 43 fill in the blank 44 fill in the blank 45 fill in the blank 46 Desired inventory, February 28 fill in the blank 47 fill in the blank 48 fill in the blank 49 fill in the blank 50 Total fill in the blank 51 fill in the blank 52 fill in the blank 53 fill in the blank 54 Estimated inventory, February 1 fill in the blank 55 fill in the blank 56 fill in the blank 57 fill in the blank 58 Total units to be purchased fill in the blank 59 fill in the blank 60 fill in the blank 61 fill in the blank 62 Unit price $fill in the blank 63 $fill in the blank 64 $fill in the blank 65 $fill in the blank 66 Total direct materials to be purchased $fill in the blank 67 $fill in the blank 68 $fill in the blank 69 $fill in the blank 70$fill in the blank 71

4. Prepare a direct labor cost budget for February.

Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 Framing Department Cutting Department Upholstery DepartmentTotalHours required for production: King fill in the blank 72 fill in the blank 73 fill in the blank 74 Prince fill in the blank 75 fill in the blank 76 fill in the blank 77 Total fill in the blank 78 fill in the blank 79 fill in the blank 80 Hourly rate $fill in the blank 81 $fill in the blank 82 $fill in the blank 83 Total direct labor cost $fill in the blank 84 $fill in the blank 85 $fill in the blank 86$fill in the blank 87