Question
Swifty Furniture builds high-end hand-made dining tables. Attacus Simmons, the companys owner, has developed the following sales forecast for 2022. 1st Quarter 2nd Quarter 3rd
Swifty Furniture builds high-end hand-made dining tables. Attacus Simmons, the companys owner, has developed the following sales forecast for 2022.
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||
|---|---|---|---|---|---|---|---|---|
| Forecasted sales (tables) | 2,700 | 3,200 | 2,800 | 1,700 |
Because of the time needed to create each table, Swifty maintains an ending Finished Goods Inventory of 20% of the following quarters budgeted sales. Swifty has been following this inventory policy for several years. The company ended 2021 with 400 tables on hand. The standard cost card for a table is as follows:
| Standard Quantity | Standard Price | Total Standard Cost | |||||||
|---|---|---|---|---|---|---|---|---|---|
| American cherry wood | 20 board feet |
| $4/board foot |
|
| $80 |
| ||
| American cherry turning square (legs) | 4 squares | $8/square | 32 | ||||||
| Direct labor | 8 DLH | $15/DLH | 120 | ||||||
| Variable overhead | 8 DLH | $45/DLH | 360 | ||||||
| Fixed overhead | 8 DLH | $12/DLH | 96 | ||||||
| $688 | |||||||||
(a)
Prepare Swiftys production budget for 2022. Assume that the desired ending inventory for 2022 is 500 tables.
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Managerial Accounting Decision Making and Motivating Performance
Authors: Srikant M. Datar, Madhav V. Rajan
1st edition
132816245, 9780132816243, 978-0137024872
