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:

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

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 the 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 the 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 $12.00per sq. yd.

Wood 7.00per linear ft.

Filler $3.00per 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.

Required:

1.sales budgetfor February.

Royal Furniture Company Sales Budget For the Month Ending February 28 Unit Sales Unit Selling Product and Area Total Sales Volume Price King: Northern Domestic Southern Domestic International Total Prince: Northern Domestic Southern Domestic International Total Total revenue from sales3. Prepare a direct materials purchases budget for February. For these boxes in which you must enter subb'acted or negative numbers use a minus sign. \f2. Prepare a production budget for February. For these homes in which you must enter sublracted or negative numbers use a minus sign