Question
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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