Sales, Production, Direct Materials Purchases, and Direct Labor Cost The budget director of Royal British 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 March is summarized as follows: a. Estimated sales of William and Kate chairs for March by sales territory: Eastern Domestic: William 7,500 units at $800 per unit Kate 6,000 units at $650 per unit Western Domestic: William 6,000 units at $700 per unit Kate 5,000 units at $550 per unit International: William 2,500 units at $600 per unit Kate 1,000 units at $350 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Fabric 5,500 sq. yds. William 1,500 units Wood 13,700 lineal ft. Kate 300 units Filler 3,800 cu. ft. Springs 3,500 units c. Desired inventories at March 31: Direct materials: Finished products: Fabric 9,000 sq. yds. William 2,000 units Wood 20,000 lineal ft. Kate 900 units Filler 5,000 cu. ft. Springs 7,500 units d. Direct materials used in production: In manufacture of William: Fabric 4.0 sq. yds. per unit of product Wood 16 lineal ft. per unit of product Filler 3.8 cu. ft. per unit of product Springs 14 units per unit of product In manufacture of Kate: Fabric 2.5 sq. yds. per unit of product Wood 12 lineal ft. per unit of product Filler 3.2 cu. ft. per unit of product Springs 10 units per unit of product e. Anticipated purchase price for direct materials: Fabric $9.00 per sq. yd. Filler $1.50 per cu. ft. Wood 5.00 per lineal ft. Springs 2.00 per unit f. Direct labor requirements: William: Framing Department 2.5 hrs. at $15 per hr Cutting Department 1.0 hr. at $12 per hr. Upholstery Department 3.0 hrs. at $16 per hr. Kate: Framing Department 1.5 hrs. at $15 per hr. Cutting Department 0.5 hr. at $12 per hr. Upholstery Department 2.0 hrs. at $16 per hr. Required: 1. Prepare a sales budget for March. Royal British Furniture Company Sales Budget For the Month Ending March 31 Product and Area Unit Sales Volume Unit Selling Price Total Sales William: Eastern Domestic $ $ Western Domestic International Total $ Kate: Eastern Domestic $ $ Western Domestic International Total $ Total revenue from sales $ 2. Prepare a production budget for March. Royal British Furniture Company Production Budget For the Month Ending March 31 William Units Kate Units Expected units to be sold Total Total units to be produced 3. Prepare a direct materials purchases budget for March. Royal British Furniture Company Direct Materials Purchases Budget For the Month Ending March 31 Fabric (sq. yds.) Wood (lineal ft.) Filler (cu. ft.) Springs (units) Total Required units for production: William Kate Total Total units to be purchased Unit price $ $ $ $ Total direct materials to be purchased $ $ $ $ $ 4. Prepare a direct labor cost budget for March. Royal British Furniture Company Direct Labor Cost Budget For the Month Ending March 31 Framing Department Cutting Department Upholstery Department Total Hours required for production: William Kate Total Hourly rate $ $ $ Total direct labor cost $ $ $ $

Sales, Production, Direct Materials Purchases, and Direct Labor Cost The budget director of Royal British 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 March is summarized as follows: a. Estimated sales of William and Kate chairs for March by sales territory: Eastern Domestic: William 7,500 units at $800 per unit Kate 6,000 units at $650 per unit Western Domestic: William 6,000 units at $700 per unit Kate 5,000 units at $550 per unit International: William 2,500 units at $600 per unit Kate 1,000 units at $350 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Fabric 5,500 sq. yds. William 1,500 units Wood 13,700 lineal ft. Kate 300 units Filler 3,800 cu. ft. Springs 3,500 units c. Desired inventories at March 31: Direct materials: Finished products: Fabric 9,000 sq. yds. William 2,000 units Wood 20,000 lineal ft. Kate 900 units Filler 5,000 cu. ft. Springs 7,500 units d. Direct materials used in production: In manufacture of William: Fabric 4.0 sq. yds. per unit of product Wood 16 lineal ft. per unit of product Filler 3.8 cu. ft. per unit of product Springs 14 units per unit of product In manufacture of Kate: Fabric 2.5 sq. yds. per unit of product Wood 12 lineal ft. per unit of product Filler 3.2 cu. ft. per unit of product Springs 10 units per unit of product e. Anticipated purchase price for direct materials: Fabric $9.00 per sq. yd. Filler $1.50 per cu. ft. Wood 5.00 per lineal ft. Springs 2.00 per unit f. Direct labor requirements: William: Framing Department 2.5 hrs. at $15 per hr Cutting Department 1.0 hr. at $12 per hr. Upholstery Department 3.0 hrs. at $16 per hr. Kate: Framing Department 1.5 hrs. at $15 per hr. Cutting Department 0.5 hr. at $12 per hr. Upholstery Department 2.0 hrs. at $16 per hr. Required: 1. Prepare a sales budget for March. Royal British Furniture Company Sales Budget For the Month Ending March 31 Product and Area Unit Sales Volume Unit Selling Price Total Sales William: Eastern Domestic $ $ Western Domestic International Total $ Kate: Eastern Domestic $ $ Western Domestic International Total $ Total revenue from sales $ 2. Prepare a production budget for March. Royal British Furniture Company Production Budget For the Month Ending March 31 William Units Kate Units Expected units to be sold Total Total units to be produced 3. Prepare a direct materials purchases budget for March. Royal British Furniture Company Direct Materials Purchases Budget For the Month Ending March 31 Fabric (sq. yds.) Wood (lineal ft.) Filler (cu. ft.) Springs (units) Total Required units for production: William Kate Total Total units to be purchased Unit price $ $ $ $ Total direct materials to be purchased $ $ $ $ $ 4. Prepare a direct labor cost budget for March. Royal British Furniture Company Direct Labor Cost Budget For the Month Ending March 31 Framing Department Cutting Department Upholstery Department Total Hours required for production: William Kate Total Hourly rate $ $ $ Total direct labor cost $ $ $ $

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 2PB: Sales, production, direct materials purchases, and direct labor cost budgets The budget director of...

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Sales, Production, Direct Materials Purchases, and Direct Labor Cost

The budget director of Royal British 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 March is summarized as follows:

a. Estimated sales of William and Kate chairs for March by sales territory:

Eastern Domestic:
	William	7,500 units at $800 per unit
	Kate	6,000 units at $650 per unit
Western Domestic:
	William	6,000 units at $700 per unit
	Kate	5,000 units at $550 per unit
International:
	William	2,500 units at $600 per unit
	Kate	1,000 units at $350 per unit

b. Estimated inventories at March 1:

Direct materials:			Finished products:
Fabric	5,500	sq. yds.	William	1,500	units
Wood	13,700	lineal ft.	Kate	300	units
Filler	3,800	cu. ft.
Springs	3,500	units

c. Desired inventories at March 31:

Direct materials:			Finished products:
Fabric	9,000	sq. yds.	William	2,000	units
Wood	20,000	lineal ft.	Kate	900	units
Filler	5,000	cu. ft.
Springs	7,500	units

d. Direct materials used in production:

In manufacture of William:
Fabric	4.0	sq. yds. per unit of product
Wood	16	lineal ft. per unit of product
Filler	3.8	cu. ft. per unit of product
Springs	14	units per unit of product
In manufacture of Kate:
Fabric	2.5	sq. yds. per unit of product
Wood	12	lineal ft. per unit of product
Filler	3.2	cu. ft. per unit of product
Springs	10	units per unit of product

e. Anticipated purchase price for direct materials:

Fabric		$9.00	per sq. yd.		Filler		$1.50	per cu. ft.
Wood		5.00	per lineal ft.		Springs		2.00	per unit

f. Direct labor requirements:

William:
Framing Department		2.5 hrs. at $15 per hr
Cutting Department		1.0 hr. at $12 per hr.
Upholstery Department		3.0 hrs. at $16 per hr.
Kate:
Framing Department		1.5 hrs. at $15 per hr.
Cutting Department		0.5 hr. at $12 per hr.
Upholstery Department		2.0 hrs. at $16 per hr.

Required:

1. Prepare a sales budget for March.

Royal British Furniture Company
Sales Budget
For the Month Ending March 31
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
William:
Eastern Domestic		$	$
Western Domestic
International
Total			$
Kate:
Eastern Domestic		$	$
Western Domestic
International
Total			$
Total revenue from sales			$

2. Prepare a production budget for March.

Royal British Furniture Company
Production Budget
For the Month Ending March 31
	William Units	Kate Units
Expected units to be sold

Total

Total units to be produced

3. Prepare a direct materials purchases budget for March.

Royal British Furniture Company
Direct Materials Purchases Budget
For the Month Ending March 31
	Fabric (sq. yds.)	Wood (lineal ft.)	Filler (cu. ft.)	Springs (units)	Total
Required units for production:
William
Kate

Total

Total units to be purchased
Unit price	$	$	$	$
Total direct materials to be purchased	$	$	$	$	$

4. Prepare a direct labor cost budget for March.

Royal British Furniture Company
Direct Labor Cost Budget
For the Month Ending March 31
	Framing Department	Cutting Department	Upholstery Department	Total
Hours required for production:
William
Kate
Total
Hourly rate	$	$	$
Total direct labor cost	$	$	$	$

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