Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units that are sold to public school systems throughout the Midwest. The controller

Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units that are sold to public school systems throughout the Midwest. The controller of the companys Desk Division is currently preparing a budget for the second quarter of the year. The following sales forecast has been made by the divisions sales manager.

April 10,000 desk-and-chair sets
May 12,000 desk-and-chair sets
June 15,000 desk-and-chair sets

Each desk-and-chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $50. Pine planks cost $.50 per board foot, and the division ends each month with enough wood to cover 10 percent of the next months production requirements. The division incurs a cost of $20 per hour for direct-labor wages and fringe benefits. The division ends each month with enough finished-goods inventory to cover 20 percent of the next months sales.

Required:

Complete the following budget schedules.

  1. Sales budget.

  2. Production budget (in sets).

  3. Raw-material purchases.

  4. Direct-labor budget.

Complete this question by entering your answers in the tabs below.

  • Required 1
  • Required 2
  • Required 3
  • Required 4

Sales budget:

April May June
Sales (in sets) 10,000
Sales price per set $50
Sales revenue $500,000 $0 $0

Production budget (in sets):

April May June
Sales 10,000
Add: Desired ending inventory 2,400 3,000
Total requirements 12,400 0 3,000
Less: Projected beginning inventory 2,000
Planned production 10,400 0 3,000

Raw-material purchases: (Round "Cost per board foot" to 2 decimal places.)

April May June
Planned production (sets) 10,400
Raw material required per set (board feet) 10
Raw material required for production (board feet) 104,000 0 0
Add: Desired ending inventory of raw material, in board feet (10% of next months requirement) 12,600 16,000
Total requirements 116,600 0 16,000
Less: Projected beginning inventory of raw material, in board feet (10% of current months requirement) 10,400
Planned purchases of raw material (board feet) 106,200 0 16,000
Cost per board foot $0.50
Planned purchases of raw material (dollars) $53,100 $0 $0

Direct-labor budget: (Round "Direct labor hours per set" to 1 decimal place.)

April May June
Planned production (sets) 10,400
Direct-labor hours per set 1.5
Direct-labor hours required 15,600 0 0
Cost per hour $20
Planned direct-labor cost $312,000 $0 $0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Tools for business decision making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

5th edition

470506954, 471345881, 978-0470506950, 9780471345886, 978-0470477144

More Books

Students also viewed these Accounting questions

Question

5. Understand how cultural values influence conflict behavior.

Answered: 1 week ago

Question

e. What do you know about your ethnic background?

Answered: 1 week ago