Sales, Production, Direct Materials Purchases, and Direct Labor Cost The budget director of Royal British 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 March is summarized as follows: a. Estimated sales of William and Kate chairs for March by sales territory: Eastern Domestic: William 9,000 units at $800 per unit Kate 6,000 units at $650 per unit Western Domestic: William 6,000 units at $700 per unit 6,000 units at $550 per unit Kate International: William 3,000 units at $600 per unit Kate 1,000 units at $350 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Fabric Wood 5,500 sq. yds. 13,700 lineal ft. William 1,500 units Kate 300 units Filler 3,800 cu. ft. Springs 3,500 units c. Desired inventories at March 31: Direct materials: Finished products: Fabric Wood 9,000 sq. yds. 20,000 lineal ft. William 2,000 units Kate 900 units Filler 5,000 cu. ft. Springs 7,500 units d. Direct materials used in production: In manufacture of William: Fabric 4.0 sq. yds. per unit of product Wood 16 lineal ft. per unit of product Filler 3.8 cu. ft. per unit of product Springs 14 units per unit of product In manufacture of Kate: Fabric 2.5 sq. yds. per unit of product Wood 12 lineal ft. per unit of product Filler 3.2 cu. ft. per unit of product Springs 10 units per unit of product e. Anticipated purchase price for direct materials: Fabric $9.00 per sq. yd. Filler $1.50 per cu. ft. Wood 5.00 per lineal ft. Springs 2.00 per unit f. Direct labor requirements: William: Framing Department 2.5 hrs. at $15 per hr. Cutting Department 1.0 hr. at $12 per hr. Upholstery Department 3.0 hrs. at $16 per hr. Kate: Framing Department 1.5 hrs. at $15 per hr. Cutting Department Upholstery Department 2.0 hrs. at $16 per hr. 0.5 hr. at $12 per hr. 2. Prepare a production budget for March. Royal British Furniture Company Production Budget For the Month Ending March 31 William Units Kate Units Expected units to be sold 0 X 0 X Plus desired inventory, March 1 1,500 X 300 X Total 1,500 X 300 X Plus estimated inventory, March 31 2,000 X 900 X Total units to be produced 3,500 X 1,200 X Feedback Check My Work 3. Prepare a direct materials purchases budget for March. Royal British Furniture Company Direct Materials Purchases Budget For the Month Ending March 31 Direct Materials Filler (cu. ft.) Required units for production: William Fabric (sq. yds.) Wood (lineal ft.) Springs (units) Total Kate 4 X 2.5 X 16 X 12 X 3.8 X 14 X 3.2 X 10 X Plus desired inventory, March 1 5,500 X 13,700 X 3,800 X 3,500 X Total 35,750 X 383,600 X 26,600 X 84,000 X Plus estimated inventory, March 31 X 9,000 X 20,000 X 5,000 X 7,500 X Total units to be purchased 44,750 X 403,600 X 31,000 X 91,500 X Unit price 5 1.5 Total direct materials to be purchased 402,750 X 2,018,000 X 46,500 X 2 183,000 X 2,650,250 X 4. Prepare a direct labor cost budget for March. Royal British Furniture Company Direct Labor Cost Budget For the Month Ending March 31 Framing Department Cutting Department Upholstery Department Hours required for production: William 2.5 X 1 X 3 x Kate 1.5 X 0.5 X 2 X Total 4 X 1.5 X 5 x Hourly rate 15 12 16 Total direct labor cost 60 X 18 X 80 x 158 x