Preparing Budgets - Sales, Production, Direct Materials Purchases, Direct Labour Cost Budget

A. The budget director of Belington 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:

1. Estimated sales of Grace and Albert chairs for March by sales territory:

Eastern Domestic:

Grace 7,500 units at $800/unit

Albert 6,000 units at $650/unit

Western Domestic:

Grace 6,000 units at $700/unit

Albert 5,000 units at $550/unit

International:

Grace. 2.500 units at $600/unit

Albert 1,000 units at $350/unit

2. Estimated inventories at March 1:

Direct Materials: Finished Products:

Fabric 5,500 sq.yds. Grace 1,500 units

Wood 13,700 lineal ft. Albert 300 units

Filler 3,800 cu. ft.

Springs 3,500 units

3. Desired inventories at March 31:

Direct Materials: Finished Products:

Fabric 9,000 sq. yds. Grace 2,000 units

Wood 20,000 lineal ft. Albert 900 units

Filler 5,000 cu. ft.

Springs 7,500 units

4. Direct materials used in production:

In manufacture of Grace:

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 Albert:

Fabric 2.5 sq. yds. Per unit of product

Wood 12 lineal ft. per unit

Filler 3.2 cu. Ft. per unit

Springs 10 units per unit of product

5. 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

6. Direct labor requirements:

Grace:

Framing Dept. 2.5hrs. at $15/hr.

Cutting Dept. 1.0 hrs. at $12/hr.

Upholstery Dept. 3.0 hrs. at $16/hr.

Albert:

Framing dept. 1.5 hrs. at $15/hr.

Cutting dept. 0.5 hr. at $12 /hr.

Upholstery dept. 2.0 hr. at $16/hr.

Requirements:

1. Make a sales budget for March.
2. Make a production budget for March.
3. Make a direct material purchases budget for March.
4. Make a direct labour cost budget for March.

Preparing Budgets Sales, Production, Direct Materials Purchases, Direct Labour Cost Budget (Points: 40) A. The budget director of elington 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: 1. Estimated sales of Grace and Albert chairs for March by sales territory: Eastern Domestic: Grace 7,500 units at $800/ unit Albert 6,000 units at $650/unit Western Domestic: Grace 6,000 units at $700 /unit Albert 5,000 units at $550/unit International: Grace 2.500 units at $600/unit Albert 1,000 units at $350/unit 2. Estimated inventories at March 1: Direct Materials: Finished Products: Fabric 5,500 sqxds. Grace 1,500 units Wood 13,700 lineal ft. Albert 300 units Filler 3,800 cu. ft. Springs 3,500 units 3. Desired inventories at March 31: Direct Materials: Finished Products: Fabric 9,000 sq. yds. Grace 2,000 units Wood 20,000 lineal it. Albert 900 units Filler 5,000 cu. ft. Springs 7,500 units 4. Direct materials used in production: In manufacture of Grace: 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 Albert: Fabric 2.5 sq. yds. Per unit of product Wood 12 lineal ft. per unit Filler 3.2 cu. Ft. per unit Springs 10 units per unit of product 5. Anticipated purchase price for direct materials: In Manufacture of Albert: Fabric Wood Filler Springs 2.5 sq. yds. Per unit of product 12 lineal ft. per unit 3.2 cu. Ft. per unit 10 units per unit of product 5. Anticipated purchase price for direct materials: Fabric $9.00 per sq. yd. Wood 5.00 per lineal ft. 6. Direct labor requirements: Grace: Framing Dept. 2.5hrs. at $15/hr. Cutting Dept. 1.0 hrs. at $12/hr. Upholstery Dept. 3.0 hrs. at $16/hr. Albert: Framing dept. 1.5 hrs. at $15 /hr. Cutting dept. 0.5 hr. at $12 /hr. Upholstery dept. 2.0 hr. at $16 /hr. Requirements: 1. 2. Prepare a sales budget for March. Prepare a production budget for March. Prepare a direct materials purchases budget for March. Prepare a direct labour cost budget for March. Filler $1.50 per cu. ft. Springs 2.00 per unit