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Your friend has come to you and asked you to help him create 4 Budgets and calculate some Variances. Use the information below to answer

Your friend has come to you and asked you to help him create 4 Budgets and calculate some Variances. Use the information below to answer the questions below:

Projected Sales Dollars for each product are as follows:

Sales Price Per Chair $17.00

Sales Price Per Table $55.00

Projected Sales Amounts for each product are as follows:

Projected Chairs Sales This Period 102,000

Projected Tables Sales This Period 82,000

Estimated and Desired Inventory amounts for each level of inventory for each product as follows:

Estimated Beginning square feet wood inventory

10,000

Estimated Beginning square feet fabric inventory

14,000

Estimated Beginning square feet foam inventory

11,000

Estimated beginning finished goods chair inventory

5,000

Estimated beginning finished goods tables inventory

6,000

Desired ending square feet wood inventory

12,000

Desired ending square feet fabric inventory

17,000

Desired ending square feet foam inventory

15,000

Desired ending finished goods chairs inventory

7,000

Desired ending finished goods tables inventory

4,000

Standard Dollar/Rate and Quantity/Time amounts for each material and labor are as follows:

Per Chair

Per Table

Standard square feet of wood

27

127

Standard square feet of fabric

9

7

Standard Square feet of foam

7

5

Wood

Fabric

Foam

Standard purchase price per square foot

$0.23

$0.52

$0.13

Chair

Table

Standard minutes to produce each product

10

25

Standard worker hourly wage

$17.00

$22.00

Actual Dollar and Quantity amounts for Wood and Actual Rate and Time amounts to produce tables

are as follows:

Actual wood square feet needed to produce chairs

2,805,000

Actual price per square foot of wood

$0.24

Actual hours needed to produce tables

34,500

Actual hourly wages paid to produce tables

$21.00

Using what you read in the Information section, please create the following Budgets and calculate the

following Variances:

1) Sales Budget

2) Production Budget

3) Direct Materials Purchases Budget

4) Direct Labor Cost Budget

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