Sales, Production, Direct Materials Purchases, andDirect Labor Cost Budgets

Thebudgetdirector 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 unitPrince750 units at $550 per unitSouthern Domestic:King340 units at $780 per unitPrince440 units at $550 per unitInternational:King360 units at $850 per unitPrince290 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 unitsPrince25 units

c. Desired inventories at February 28:

Direct materials:Fabric390 sq. yds.Wood650 linear ft.Filler300 cu. ft.Springs540 unitsFinished products:King80 unitsPrince35 units

d. Direct materials used in production:

In manufacture of King:Fabric6.0 sq. yds. per unit of productWood38 linear ft. per unit of productFiller4.2 cu. ft. per unit of productSprings16 units per unit of productIn manufacture of Prince:Fabric4.0 sq. yds. per unit of productWood26 linear ft. per unit of productFiller3.4 cu. ft. per unit of productSprings12 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 asales budgetfor 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 4

fill in the blank 5

fill in the blank 6

Internationalfill in the blank 7

fill in the blank 8

fill 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 15

fill in the blank 16

fill in the blank 17

Internationalfill in the blank 18

fill in the blank 19

fill in the blank 20

Totalfill in the blank 21

$fill in the blank 22

Total revenue from sales$fill in the blank 23

2.Prepare aproduction budgetfor 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 28UnitsKingPrinceExpected units to be sold

fill in the blank 25

fill in the blank 26

Desired inventory, February 28

fill in the blank 28

fill in the blank 29

Total units available

fill in the blank 31

fill in the blank 32

Estimated inventory, February 1

fill in the blank 34

fill in the blank 35

Total units to be produced

fill in the blank 37

fill in the blank 38

3.Prepare adirect materials purchases budgetfor 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 28Direct MaterialsFabric

(sq. yds.)Wood

(linear ft.)Filler

(cu. ft.)Springs

(units)TotalRequired units for production:Kingfill in the blank 39

fill in the blank 40

fill in the blank 41

fill in the blank 42

Princefill in the blank 43

fill in the blank 44

fill in the blank 45

fill in the blank 46

Desired inventory, February 28fill in the blank 47

fill in the blank 48

fill in the blank 49

fill in the blank 50

Totalfill in the blank 51

fill in the blank 52

fill in the blank 53

fill in the blank 54

Estimated inventory, February 1fill in the blank 55

fill in the blank 56

fill in the blank 57

fill in the blank 58

Total units to be purchasedfill 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 adirect labor cost budgetfor February.

Royal Furniture Company

Direct Labor Cost Budget

For the Month Ending February 28Framing

DepartmentCutting

DepartmentUpholstery

DepartmentTotalHours required for production:Kingfill in the blank 72

fill in the blank 73

fill in the blank 74

Princefill in the blank 75

fill in the blank 76

fill in the blank 77

Totalfill 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