Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Royal 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 February is summarized as follows: a. Estimated sales of King and Prince chairs for February by sales territory: Northern Domestic: King 610 units at $780 per unit Prince 750 units at $550 per unit Southern Domestic: King 340 units at $780 per unit Prince 440 units at $550 per unit International: King 360 units at $850 per unit Prince 290 units at $600 per unit b. Estimated inventories at February 1: Direct materials: Fabric 420 sq. yds. Wood 580 linear ft. Filler 250 cu. ft. Springs 660 units Finished products: King 90 units Prince 25 units c. Desired inventories at February 28: Direct materials: Fabric 390 sq. yds. Wood 650 linear ft. Filler 300 cu. ft. Springs 540 units Finished products: King 80 units Prince 35 units d. Direct materials used in production: In manufacture of King: Fabric 6.0 sq. yds. per unit of product Wood 38 linear ft. per unit of product Filler 4.2 cu. ft. per unit of product Springs 16 units per unit of product In manufacture of Prince: Fabric 4.0 sq. yds. per unit of product Wood 26 linear ft. per unit of product Filler 3.4 cu. ft. per unit of product Springs 12 units per unit of product e. Anticipated purchase price for direct materials: Fabric $12.00 per sq. yd. Wood 7.00 per linear ft. Filler $3.00 per cu. ft. Springs 4.50 per unit f. Direct labor requirements: King: Framing Department 1.2 hrs. at $12 per hr. Cutting Department 0.5 hr. at $14 per hr. Upholstery Department 0.8 hr. at $15 per hr. Prince: Framing Department 1.0 hr. at $12 per hr. Cutting Department 0.4 hr. at $14 per hr. Upholstery Department 0.6 hr. at $15 per hr. 2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince fill in the blank 25 fill in the blank 26 fill in the blank 28 fill in the blank 29 fill in the blank 31 fill in the blank 32 fill in the blank 34 fill in the blank 35 fill in the blank 37 fill in the blank 38 3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Direct Materials Fabric (sq. yds.) Wood (linear ft.) Filler (cu. ft.) Springs (units) Total Required units for production: King fill in the blank 39 fill in the blank 40 fill in the blank 41 fill in the blank 42 Prince fill in the blank 43 fill in the blank 44 fill in the blank 45 fill in the blank 46 Desired inventory, February 28 fill in the blank 47 fill in the blank 48 fill in the blank 49 fill in the blank 50 Total fill in the blank 51 fill in the blank 52 fill in the blank 53 fill in the blank 54 Estimated inventory, February 1 fill in the blank 55 fill in the blank 56 fill in the blank 57 fill in the blank 58 Total units to be purchased fill in the blank 59 fill in the blank 60 fill in the blank 61 fill in the blank 62 Unit price $fill in the blank 63 $fill in the blank 64 $fill in the blank 65 $fill in the blank 66 Total direct materials to be purchased $fill in the blank 67 $fill in the blank 68 $fill in the blank 69 $fill in the blank 70 $fill in the blank 71 4. Prepare a direct labor cost budget for February. Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 Framing Department Cutting Department Upholstery Department Total Hours required for production: King fill in the blank 72 fill in the blank 73 fill in the blank 74 Prince fill in the blank 75 fill in the blank 76 fill in the blank 77 Total fill in the blank 78 fill in the blank 79 fill in the blank 80 Hourly rate $fill in the blank 81 $fill in the blank 82 $fill in the blank 83 Total direct labor cost $fill in the blank 84 $fill in the blank 85 $fill in the blank 86 $fill in the blank 87

Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Royal 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 February is summarized as follows: a. Estimated sales of King and Prince chairs for February by sales territory: Northern Domestic: King 610 units at $780 per unit Prince 750 units at $550 per unit Southern Domestic: King 340 units at $780 per unit Prince 440 units at $550 per unit International: King 360 units at $850 per unit Prince 290 units at $600 per unit b. Estimated inventories at February 1: Direct materials: Fabric 420 sq. yds. Wood 580 linear ft. Filler 250 cu. ft. Springs 660 units Finished products: King 90 units Prince 25 units c. Desired inventories at February 28: Direct materials: Fabric 390 sq. yds. Wood 650 linear ft. Filler 300 cu. ft. Springs 540 units Finished products: King 80 units Prince 35 units d. Direct materials used in production: In manufacture of King: Fabric 6.0 sq. yds. per unit of product Wood 38 linear ft. per unit of product Filler 4.2 cu. ft. per unit of product Springs 16 units per unit of product In manufacture of Prince: Fabric 4.0 sq. yds. per unit of product Wood 26 linear ft. per unit of product Filler 3.4 cu. ft. per unit of product Springs 12 units per unit of product e. Anticipated purchase price for direct materials: Fabric $12.00 per sq. yd. Wood 7.00 per linear ft. Filler $3.00 per cu. ft. Springs 4.50 per unit f. Direct labor requirements: King: Framing Department 1.2 hrs. at $12 per hr. Cutting Department 0.5 hr. at $14 per hr. Upholstery Department 0.8 hr. at $15 per hr. Prince: Framing Department 1.0 hr. at $12 per hr. Cutting Department 0.4 hr. at $14 per hr. Upholstery Department 0.6 hr. at $15 per hr. 2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince fill in the blank 25 fill in the blank 26 fill in the blank 28 fill in the blank 29 fill in the blank 31 fill in the blank 32 fill in the blank 34 fill in the blank 35 fill in the blank 37 fill in the blank 38 3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Direct Materials Fabric (sq. yds.) Wood (linear ft.) Filler (cu. ft.) Springs (units) Total Required units for production: King fill in the blank 39 fill in the blank 40 fill in the blank 41 fill in the blank 42 Prince fill in the blank 43 fill in the blank 44 fill in the blank 45 fill in the blank 46 Desired inventory, February 28 fill in the blank 47 fill in the blank 48 fill in the blank 49 fill in the blank 50 Total fill in the blank 51 fill in the blank 52 fill in the blank 53 fill in the blank 54 Estimated inventory, February 1 fill in the blank 55 fill in the blank 56 fill in the blank 57 fill in the blank 58 Total units to be purchased fill in the blank 59 fill in the blank 60 fill in the blank 61 fill in the blank 62 Unit price $fill in the blank 63 $fill in the blank 64 $fill in the blank 65 $fill in the blank 66 Total direct materials to be purchased $fill in the blank 67 $fill in the blank 68 $fill in the blank 69 $fill in the blank 70 $fill in the blank 71 4. Prepare a direct labor cost budget for February. Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 Framing Department Cutting Department Upholstery Department Total Hours required for production: King fill in the blank 72 fill in the blank 73 fill in the blank 74 Prince fill in the blank 75 fill in the blank 76 fill in the blank 77 Total fill in the blank 78 fill in the blank 79 fill in the blank 80 Hourly rate $fill in the blank 81 $fill in the blank 82 $fill in the blank 83 Total direct labor cost $fill in the blank 84 $fill in the blank 85 $fill in the blank 86 $fill in the blank 87

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 Budgets

The budget director of Royal 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 February is summarized as follows:

a. Estimated sales of King and Prince chairs for February by sales territory:

Northern Domestic:
King	610 units at $780 per unit
Prince	750 units at $550 per unit
Southern Domestic:
King	340 units at $780 per unit
Prince	440 units at $550 per unit
International:
King	360 units at $850 per unit
Prince	290 units at $600 per unit

b. Estimated inventories at February 1:

Direct materials:
Fabric	420 sq. yds.
Wood	580 linear ft.
Filler	250 cu. ft.
Springs	660 units
Finished products:
King	90 units
Prince	25 units

c. Desired inventories at February 28:

Direct materials:
Fabric	390 sq. yds.
Wood	650 linear ft.
Filler	300 cu. ft.
Springs	540 units
Finished products:
King	80 units
Prince	35 units

d. Direct materials used in production:

In manufacture of King:
Fabric	6.0 sq. yds. per unit of product
Wood	38 linear ft. per unit of product
Filler	4.2 cu. ft. per unit of product
Springs	16 units per unit of product
In manufacture of Prince:
Fabric	4.0 sq. yds. per unit of product
Wood	26 linear ft. per unit of product
Filler	3.4 cu. ft. per unit of product
Springs	12 units per unit of product

e. Anticipated purchase price for direct materials:

Fabric	$12.00	per sq. yd.
Wood	7.00	per linear ft.
Filler	$3.00	per cu. ft.
Springs	4.50	per unit

f. Direct labor requirements:

King:
Framing Department	1.2 hrs. at $12 per hr.
Cutting Department	0.5 hr. at $14 per hr.
Upholstery Department	0.8 hr. at $15 per hr.
Prince:
Framing Department	1.0 hr. at $12 per hr.
Cutting Department	0.4 hr. at $14 per hr.
Upholstery Department	0.6 hr. at $15 per hr.

2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Royal Furniture Company Production Budget For the Month Ending February 28
	Units
	King	Prince
	fill in the blank 25	fill in the blank 26
	fill in the blank 28	fill in the blank 29
	fill in the blank 31	fill in the blank 32
	fill in the blank 34	fill in the blank 35
	fill in the blank 37	fill in the blank 38

3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28
	Direct Materials
		Fabric (sq. yds.)	Wood (linear ft.)	Filler (cu. ft.)	Springs (units)	Total
Required units for production:
King		fill in the blank 39	fill in the blank 40	fill in the blank 41	fill in the blank 42
Prince		fill in the blank 43	fill in the blank 44	fill in the blank 45	fill in the blank 46
Desired inventory, February 28		fill in the blank 47	fill in the blank 48	fill in the blank 49	fill in the blank 50
Total		fill in the blank 51	fill in the blank 52	fill in the blank 53	fill in the blank 54
Estimated inventory, February 1		fill in the blank 55	fill in the blank 56	fill in the blank 57	fill in the blank 58
Total units to be purchased		fill in the blank 59	fill in the blank 60	fill in the blank 61	fill in the blank 62
Unit price		$fill in the blank 63	$fill in the blank 64	$fill in the blank 65	$fill in the blank 66
Total direct materials to be purchased		$fill in the blank 67	$fill in the blank 68	$fill in the blank 69	$fill in the blank 70	$fill in the blank 71

4. Prepare a direct labor cost budget for February.

Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28
		Framing Department		Cutting Department		Upholstery Department	Total
Hours required for production:
	King		fill in the blank 72		fill in the blank 73		fill in the blank 74
	Prince		fill in the blank 75		fill in the blank 76		fill in the blank 77
	Total		fill in the blank 78		fill in the blank 79		fill in the blank 80
Hourly rate		$fill in the blank 81		$fill in the blank 82		$fill in the blank 83
Total direct labor cost		$fill in the blank 84		$fill in the blank 85		$fill in the blank 86	$fill in the blank 87

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