Aaron Furniture builds high-end hand-made dining tables. Attacus Simmons, the company’s  owner, has developed the following sales forecast for 2022.

Because of the time needed to create each table, Aaron maintains an ending Finished Goods Inventory of  20% of the following quarter’s budgeted sales. Aaron has been following this inventory policy for several  years. The company ended 2021 with 475 tables on hand.

The standard cost card for a table is as follows:

Required

a. Prepare Aaron’s production budget for 2022. Assume that the desired ending inventory for 2022 is  500 tables.

b. Aaron maintains inventory of American cherry wood equal to 10% of the following quarter’s production needs. On December 31, 2021, Aaron’s physical inventory count showed 4,800 board feet of  American cherry. Due to an anticipated price increase in 2023, managers want to have 5,000 board  feet of American cherry wood in inventory on December 31, 2022. Prepare Aaron’s 2022 direct materials purchases budget for American cherry wood.

c. Prepare Aaron’s direct labor budget for 2022.

d. Assume that because of the skill level required to make the tables, Aaron cannot easily hire additional workers to handle peaks in demand. Consequently, the company maintains a steady workforce of 40 employees and guarantees each worker 500 hours per quarter. For any additional time  required to complete the scheduled production, these same workers earn 1.5 times their normal  hourly rate. Prepare Aaron’s direct labor budget for 2022.

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1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Forecasted sales (tables) 2,700 3,000 2,800 1,900