School Days Furniture, Inc., manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school systems throughout the midwest. The controller of the company’s Desk Division is currently preparing a budget for the third quarter of the year. The following sales forecast has been made by the division’s sales manager.

July..................................... 5,000 desk-and-chair sets

August................................ 6,000 desk-and-chair sets

September...........................7,500 desk-and-chair sets

Each desk- and- chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $ 60. Pine planks cost $. 60 per board foot and the division ends each month with enough wood to cover 10 percent of the next month’s production requirements. The division incurs a cost of $ 21.00 per hour for direct- labor wages and fringe benefits. The division ends each month with enough finished- goods inventory to cover 20 percent of the next month’s sales.

Required:

Complete the following budget schedules.

1. Sales budget:

2. Production budget (in sets):

3. Direct-Labor budget:

3. Raw material purchases:

4. Direct-labor budget:

5. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following information changes: each set sells for $ 62 and the direct- labor cost per hour is $22.

Transcribed Image Text:

July 5,000 x $60 August September Sales (in sets). Sales price per set Sales revenue $300,000 August September Add: Desired ending inventory Total requirements Less: Projected beginning inventory Planned production. 5,000 1,200 6,200 ....".ux