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 8,000 units at $800 per unit Kate 6,000 units at $650 per unit Western Domestic: William 6,000 units at $700 per unit Kate 7,000 units at $550 per unit International: William 4,500 units at $600 per unit Kate 1,000 units at $350 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Fabric 5,500 sq yds. William 1,500 units Wood 13,700 lineal it Kate 300 units Filler 3,800 cu. ft. Springs 3.500 units c. Desired inventories at March 31: Direct materials: Finished products: Fabric 9,000 54. yds. William 2,000 units Wood 20,000 lineal it 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 it. per unit of product 3.8 cu. It. per unit of product Filler Springs 14 units per unit of product In manufacture of Kate: Fabric 2.5 sq yds. per unit of product 12 lineal it. per unit of product Wood 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 it Springs 2.00 per unit 1. 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 0.5 hr at $12 per hr. Upholstery Department 2.0 hrs. at $16 per hr. Royal British Furniture Company Direct Materials Purchases Budget For the Month Ending March 31 Direct Materials Filler (cu. ft. Fabric (sq. yds.) Wood (lineal it.) Springs (units) Total Required units for production: William kale Plus desired inventory, March 31 9,000 | 20,000 5.000 7,500 Total x Less estimated Inventory, March 1 Total units to be purchased Unit price si Total direct materials to be purchased Check My Work For each material and for both products, the production quantity plus the desired ending inventory minus the estimated beginning inventory equals the quantity of direct materials to be purchased. Multiply the quantity by the price per unit. 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 Total Hours required for production: William Kate Total ion. Hourly rate Total direct labor cost 0
