The budget director of Regal 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 August 2010 is summarized as follows:
a. Estimated sales of King and Prince chairs for August by sales territory:

Northern Domestic:
King . . . . . . . . . . . . . . . . 5,500 units at $750 per unit
Prince . . . . . . . . . . . . . . . 6,900 units at $520 per unit
Southern Domestic:
King . . . . . . . . . . . . . . . . 3,200 units at $690 per unit
Prince . . . . . . . . . . . . . . . 4,000 units at $580 per unit
International:
King . . . . . . . . . . . . . . . . 1,450 units at $780 per unit
Prince . . . . . . . . . . . . . . . 900 units at $600 per unit


b. Estimated inventories at August 1:

Direct materials: Finished products:
Fabric . . . . . . . . . . . . . . . 4,500 sq. yds. King . . . . . . . . . . . . . . . 950 units
Wood . . . . . . . . . . . . . . . 6,000 lineal ft. Prince . . . . . . . . . . . . . . 280 units
Filler . . . . . . . . . . . . . . . . 2,800 cu. ft.
Springs . . . . . . . . . . . . . . 6,700 units

c. Desired inventories at August 31:

Direct materials: Finished products:
Fabric . . . . . . . . . . . . . . . 4,300 sq. yds. King . . . . . . . . . . . . . . . 800 units
Wood . . . . . . . . . . . . . . . 6,200 lineal ft. Prince . . . . . . . . . . . . . . 400 units
Filler . . . . . . . . . . . . . . . . 3,100 cu. ft.
Springs . . . . . . . . . . . . . . 7,500 units

d. Direct materials used in production:

In manufacture of King:
Fabric . . . . . . . . . . . . . . . 5.0 sq. yds. per unit of product
Wood . . . . . . . . . . . . . . . 35 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 Prince:
Fabric . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 sq. yds. per unit of product
Wood . . . . . . . . . . . . . . . . . . . . . . . . . 25 lineal ft. per unit of product
Filler . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 cu. ft. per unit of product
Springs . . . . . . . . . . . . . . . . . . . . . . . . 10 units per unit of product

e. Anticipated purchase price for direct materials:

Fabric . . . . . . . . . . . . . $12.00 per sq. yd. Filler . . . . . . . . . . . . $3.50 per cu. ft.
Wood . . . . . . . . . . . . . . 8.00 per lineal ft. Springs . . . . . . . . . . 4.50 per unit

f. Direct labor requirements:

King:
Framing Department. . . . . . . . . . . . . . . 2.5 hrs. at $12 per hr.
Cutting Department. . . . . . . . . . . . . . . 1.5 hrs. at $11 per hr.
Upholstery Department. . . . . . . . . . . . 2.4 hrs. at $14 per hr.
Prince:
Framing Department. . . . . . . . . . . . . . . 1.8 hrs. at $12 per hr.
Cutting Department. . . . . . . . . . . . . . . 0.5 hrs. at $11 per hr.
Upholstery Department. . . . . . . . . . . . 2.0 hrs. at $14 per hr.


Instructions
1. Prepare a sales budget for August.
2. Prepare a production budget for August.
3. Prepare a direct materials purchases budget for August.
4. Prepare a direct labor cost budget for August.