The budget director of Royal 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 July 2006 is summarized as follows:
a. Estimated sales of King and Prince chairs for July by sales territory:
Northern Domestic:
King . . . . . . . . . . . . . . . . 5,700 units at $600 per unit
Prince . . . . . . . . . . . . . . . 6,900 units at $450 per unit
Southern Domestic:
King . . . . . . . . . . . . . . . . 3,600 units at $620 per unit
Prince . . . . . . . . . . . . . . . 4,000 units at $460 per unit
International:
King . . . . . . . . . . . . . . . . 1,100 units at $700 per unit
Prince . . . . . . . . . . . . . . . 1,300 units at $500 per unit
b. Estimated inventories at July 1:
Direct materials:
Fabric. . . . . . . . . . . . . . . . . . . 4,300 sq. yds.
Wood. . . . . . . . . . . . . . . . . . . 6,300 lineal ft.
Filler. . . . . . . . . . . . . . . . . . . . 2,500 cu. ft.
Springs. . . . . . . . . . . . . . . . . . 7,500 units
Finished products:
King . . . . . . . . . . . . . . . . . . . . . 840 units
Prince . . . . . . . . . . . . . . . . . . . . 280 units

c. Desired inventories at July 31:
Direct materials:
Fabric. . . . . . . . . . . . . . . . . . . 4,500 sq. yds.
Wood. . . . . . . . . . . . . . . . . . . 5,700 lineal ft.
Filler. . . . . . . . . . . . . . . . . . . 2,700 cu. ft.
Springs . . . . . . . . . . . . . . . . . . 7,000 units
Finished products:
King . . . . . . . . . . . . . . . . . . . . . 700 units
Prince . . . . . . . . . . . . . . . . . . . . 300 units
d. Direct materials used in production:
In manufacture of King:
Fabric. . . . . . . . . . 4 sq. yds. per unit of product
Wood. . . . . . . . . . 30 lineal ft. per unit of product
Filler. . . . . . . . . . . 3.5 cu. ft. per unit of product
Springs. . . . . . . . . 12 units per unit of product
In manufacture of Prince:
Fabric. . . . . . . . . . 3.2 sq. yds. per unit of product
Wood. . . . . . . . . . 20 lineal ft. per unit of product
Filler. . . . . . . . . . . 3.0 cu. ft. per unit of product
Springs. . . . . . . . . 10 units per unit of product
e. Anticipated purchase price for direct materials:
Fabric . . . . . . . . . . . . . $9.00 per square yard
Wood . . . . . . . . . . . . . 6.00 per lineal foot
Filler . . . . . . . . . . . . . . . $4.50 per cubic foot
Springs . . . . . . . . . . . . . 2.50 per unit
f. Direct labor requirements:
King:
Framing Department . . . . . . . . . 2.0 hours at $13 per hour
Cutting Department . . . . . . . . . 0.5 hour at $10 per hour
Upholstery Department . . . . . . . 2.5 hours at $12 per hour
Prince:
Framing Department . . . . . . . . . 1.5 hours at $13 per hour
Cutting Department . . . . . . . . . 0.4 hour at $10 per hour
Upholstery Department . . . . . . . 1.8 hours at $12 per hour

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