Question

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.


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  • CreatedApril 22, 2014
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