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Sales, production, direct materials purchases, and direct labor cost budgets
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 February is summarized as follows:
a. Estimated sales of King and Prince chairs for February by sales territory:
Northern Domestic:
King 610 units at $780 per unit
Prince 750 units at $550 per unit
Southern Domestic:
King 340 units at $780 per unit
Prince 440 units at $550 per unit
International:
#160; King 360 units at $850 per unit
Prince 290 units at $600 per unit
b. Estimated inventories at February 1:
Direct materials:
Fabric 420 sq. yds.
Wood 580 linear ft.
Filler 250 cu. ft.
Springs 660 units
Finished products:
King 90 units
Prince 25 units
c. Desired inventories at February 28:
Direct materials:
Fabric 390 sq. yds.
Wood 650 linear ft.
Filler 300 cu. ft.
Springs 540 units
Finished products:
King 80 units
Prince 35 units
d. Direct materials used in production:
In manufacture of King:
Fabric 6.0 sq. yds. per unit of product
Wood 38 linear ft. per unit of product
Filler 4.2 cu. ft. per unit of product
Springs 16 units per unit of product
In manufacture of Prince:
Fabric 4.0 sq. yds. per unit of product
Wood 26 linear ft. per unit of product
Filler 3.4 cu. ft. per unit of product
Springs 12 units per unit of product
e. Anticipated purchase price for direct materials:
Fabric $12.00 per sq. yd.
Wood 7.00 per linear ft.
Filler $3.00 per cu. ft.
Springs 4.50 per unit
f. Direct labor requirements:
King:
Framing Department 1.2 hrs. at $12 per hr.
Cutting Department 0.5 hr. at $14 per hr.
Upholstery Department 0.8 hr. at $15 per hr.
Prince:
Framing Department 1.0 hr. at $12 per hr.
Cutting Department 0.4 hr. at $14 per hr.
Upholstery Department 0.6 hr. at $15 per hr.
Required:
1. Prepare a sales budget for February.
Royal Furniture Company
Sales Budget
For the Month Ending February 28
Product and Area Unit Sales
Volume Unit Selling
Price Total Sales
King:
Northern Domestic fill in the blank 1
610
$fill in the blank 2
780
$fill in the blank 3
475,800
Southern Domestic fill in the blank 4
340
fill in the blank 5
780
fill in the blank 6
265,200
International fill in the blank 7
360
fill in the blank 8
850
fill in the blank 9
306,000
Total fill in the blank 10
1,310
$fill in the blank 11
1,047,000
Prince:
Northern Domestic fill in the blank 12
750
$fill in the blank 13
550
$fill in the blank 14
412,500
Southern Domestic fill in the blank 15
440
fill in the blank 16
550
fill in the blank 17
242,000
International fill in the blank 18
290
fill in the blank 19
600
fill in the blank 20
174,000
Total fill in the blank 21
1,480
$fill in the blank 22
828,500
Total revenue from sales $fill in the blank 23
1,875,500
2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Royal Furniture Company
Production Budget
For the Month Ending February 28
Line Item Description Units
King Units
Prince
Expected units to be sold
fill in the blank 25
1,310
fill in the blank 26
1,480
Desired inventory, February 28
fill in the blank 28
80
fill in the blank 29
35
Total units available
fill in the blank 31
1,390
fill in the blank 32
1,515
Estimated inventory, February 1
fill in the blank 34
fill in the blank 35
Total units to be produced
fill in the blank 37
fill in the blank 38
3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Royal Furniture Company
Direct Materials Purchases Budget
For the Month Ending February 28
Line Item Description Direct
Materials
Fabric
(sq. yds.) Direct
Materials
Wood
(linear ft.) Direct
Materials
Filler
(cu. ft.) Direct
Materials
Springs
(units) Direct
Materials
Total
Required units for production:
King fill in the blank 39
7,800
fill in the blank 40
49,400
fill in the blank 41
5,460
fill in the blank 42
20,800
Prince fill in the blank 43
5,960
fill in the blank 44
38,740
fill in the blank 45
5,066
fill in the blank 46
17,880
Desired inventory, February 28 fill in the blank 47
390
fill in the blank 48
650
fill in the blank 49
300
fill in the blank 50
540
Total fill in the blank 51
14,150
fill in the blank 52
88,790
fill in the blank 53
10,826
fill in the blank 54
39,220
Estimated inventory, February 1 fill in the blank 55
fill in the blank 56
fill in the blank 57
fill in the blank 58
Total units to be purchased fill in the blank 59
fill in the blank 60
fill in the blank 61
fill in the blank 62
Unit price $fill in the blank 63
12.00
$fill in the blank 64
7.00
$fill in the blank 65
3.00
$fill in the blank 66
4.50
Total direct materials to be purchased $fill in the blank 67
164,760
$fill in the blank 68
617,470
$fill in the blank 69
31,728
$fill in the blank 70
173,430
$fill in the blank 71
4. Prepare a direct labor cost budget for February.
Royal Furniture Company
Direct Labor Cost Budget
For the Month Ending February 28
Line Item Description Framing
Department Cutting
Department Upholstery
Department Total
Hours required for production:
King fill in the blank 72
1,560
fill in the blank 73
650
fill in the blank 74
1,040
Prince fill in the blank 75
1,490
fill in the blank 76
596
fill in the blank 77
894
Total fill in the blank 78
3,050
fill in the blank 79
1,246
fill in the blank 80
1,934
Hourly rate $fill in the blank 81
12
$fill in the blank 82
14
$fill in the blank 83
15
Total direct labor cost $fill in the blank 84
36,600
$fill in the blank 85
17,444
$fill in the blank 86
29,010
$fill in the blank 87
83,054
Question Content Area
Sales, production, direct materials purchases, and direct labor cost budgets
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 February is summarized as follows:
a. Estimated sales of King and Prince chairs for February by sales territory:
Northern Domestic:
King 610 units at $780 per unit
Prince 750 units at $550 per unit
Southern Domestic:
King 340 units at $780 per unit
Prince 440 units at $550 per unit
International:
#160; King 360 units at $850 per unit
Prince 290 units at $600 per unit
b. Estimated inventories at February 1:
Direct materials:
Fabric 420 sq. yds.
Wood 580 linear ft.
Filler 250 cu. ft.
Springs 660 units
Finished products:
King 90 units
Prince 25 units
c. Desired inventories at February 28:
Direct materials:
Fabric 390 sq. yds.
Wood 650 linear ft.
Filler 300 cu. ft.
Springs 540 units
Finished products:
King 80 units
Prince 35 units
d. Direct materials used in production:
In manufacture of King:
Fabric 6.0 sq. yds. per unit of product
Wood 38 linear ft. per unit of product
Filler 4.2 cu. ft. per unit of product
Springs 16 units per unit of product
In manufacture of Prince:
Fabric 4.0 sq. yds. per unit of product
Wood 26 linear ft. per unit of product
Filler 3.4 cu. ft. per unit of product
Springs 12 units per unit of product
e. Anticipated purchase price for direct materials:
Fabric $12.00 per sq. yd.
Wood 7.00 per linear ft.
Filler $3.00 per cu. ft.
Springs 4.50 per unit
f. Direct labor requirements:
King:
Framing Department 1.2 hrs. at $12 per hr.
Cutting Department 0.5 hr. at $14 per hr.
Upholstery Department 0.8 hr. at $15 per hr.
Prince:
Framing Department 1.0 hr. at $12 per hr.
Cutting Department 0.4 hr. at $14 per hr.
Upholstery Department 0.6 hr. at $15 per hr.
Required:
1. Prepare a sales budget for February.
Royal Furniture Company
Sales Budget
For the Month Ending February 28
Product and Area Unit Sales
Volume Unit Selling
Price Total Sales
King:
Northern Domestic fill in the blank 1
610
$fill in the blank 2
780
$fill in the blank 3
475,800
Southern Domestic fill in the blank 4
340
fill in the blank 5
780
fill in the blank 6
265,200
International fill in the blank 7
360
fill in the blank 8
850
fill in the blank 9
306,000
Total fill in the blank 10
1,310
$fill in the blank 11
1,047,000
Prince:
Northern Domestic fill in the blank 12
750
$fill in the blank 13
550
$fill in the blank 14
412,500
Southern Domestic fill in the blank 15
440
fill in the blank 16
550
fill in the blank 17
242,000
International fill in the blank 18
290
fill in the blank 19
600
fill in the blank 20
174,000
Total fill in the blank 21
1,480
$fill in the blank 22
828,500
Total revenue from sales $fill in the blank 23
1,875,500
2. Prepare a production budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Royal Furniture Company
Production Budget
For the Month Ending February 28
Line Item Description Units
King Units
Prince
Expected units to be sold
fill in the blank 25
1,310
fill in the blank 26
1,480
Desired inventory, February 28
fill in the blank 28
80
fill in the blank 29
35
Total units available
fill in the blank 31
1,390
fill in the blank 32
1,515
Estimated inventory, February 1
fill in the blank 34
fill in the blank 35
Total units to be produced
fill in the blank 37
fill in the blank 38
3. Prepare a direct materials purchases budget for February. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Royal Furniture Company
Direct Materials Purchases Budget
For the Month Ending February 28
Line Item Description Direct
Materials
Fabric
(sq. yds.) Direct
Materials
Wood
(linear ft.) Direct
Materials
Filler
(cu. ft.) Direct
Materials
Springs
(units) Direct
Materials
Total
Required units for production:
King fill in the blank 39
7,800
fill in the blank 40
49,400
fill in the blank 41
5,460
fill in the blank 42
20,800
Prince fill in the blank 43
5,960
fill in the blank 44
38,740
fill in the blank 45
5,066
fill in the blank 46
17,880
Desired inventory, February 28 fill in the blank 47
390
fill in the blank 48
650
fill in the blank 49
300
fill in the blank 50
540
Total fill in the blank 51
14,150
fill in the blank 52
88,790
fill in the blank 53
10,826
fill in the blank 54
39,220
Estimated inventory, February 1 fill in the blank 55
fill in the blank 56
fill in the blank 57
fill in the blank 58
Total units to be purchased fill in the blank 59
fill in the blank 60
fill in the blank 61
fill in the blank 62
Unit price $fill in the blank 63
12.00
$fill in the blank 64
7.00
$fill in the blank 65
3.00
$fill in the blank 66
4.50
Total direct materials to be purchased $fill in the blank 67
164,760
$fill in the blank 68
617,470
$fill in the blank 69
31,728
$fill in the blank 70
173,430
$fill in the blank 71
4. Prepare a direct labor cost budget for February.
Royal Furniture Company
Direct Labor Cost Budget
For the Month Ending February 28
Line Item Description Framing
Department Cutting
Department Upholstery
Department Total
Hours required for production:
King fill in the blank 72
1,560
fill in the blank 73
650
fill in the blank 74
1,040
Prince fill in the blank 75
1,490
fill in the blank 76
596
fill in the blank 77
894
Total fill in the blank 78
3,050
fill in the blank 79
1,246
fill in the blank 80
1,934
Hourly rate $fill in the blank 81
12
$fill in the blank 82
14
$fill in the blank 83
15
Total direct labor cost $fill in the blank 84
36,600
$fill in the blank 85
17,444
$fill in the blank 86
29,010
$fill in the blank 87
83,054
Answers
Answered by
GPT-4o mini
Let’s calculate the necessary values for each section of the budgets requested.
### 1. Sales Budget for February:
**Royal Furniture Company**
**Sales Budget**
**For the Month Ending February 28**
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
|--------------------------|-------------------|--------------------|--------------|
| **King:** | | | |
| Northern Domestic | 610 | $780 | $475,800 |
| Southern Domestic | 340 | $780 | $265,200 |
| International | 360 | $850 | $306,000 |
| **Total King** | **1,310** | | **$1,047,000** |
| **Prince:** | | | |
| Northern Domestic | 750 | $550 | $412,500 |
| Southern Domestic | 440 | $550 | $242,000 |
| International | 290 | $600 | $174,000 |
| **Total Prince** | **1,480** | | **$828,500** |
| **Total Revenue from Sales** | | | **$1,875,500** |
### 2. Production Budget for February:
**Royal Furniture Company**
**Production Budget**
**For the Month Ending February 28**
| Line Item Description | Units |
|---------------------------------|-------|
| **King** | |
| Expected units to be sold | 1,310 |
| Desired inventory, February 28 | 80 |
| **Total units available** | 1,390 |
| Estimated inventory, February 1 | 90 |
| **Total units to be produced** | 1,300 | *(1,390 - 90)* |
| Line Item Description | Units |
|---------------------------------|-------|
| **Prince** | |
| Expected units to be sold | 1,480 |
| Desired inventory, February 28 | 35 |
| **Total units available** | 1,515 |
| Estimated inventory, February 1 | 25 |
| **Total units to be produced** | 1,490 | *(1,515 - 25)* |
### 3. Direct Materials Purchases Budget for February:
**Royal Furniture Company**
**Direct Materials Purchases Budget**
**For the Month Ending February 28**
| Line Item Description | Direct Materials Fabric (sq. yds.) | Direct Materials Wood (linear ft.) | Direct Materials Filler (cu. ft.) | Direct Materials Springs (units) |
|-----------------------------------|------------------------------------|--------------------------------------|-------------------------------------|----------------------------------|
| Total required units for production: | | | | |
| **King** | 7,800 | 49,400 | 5,460 | 20,800 |
| **Prince** | 5,960 | 38,740 | 5,066 | 17,880 |
| **Total Required** | 13,760 | 88,140 | 10,526 | 38,680 |
| Desired inventory, February 28 | 390 | 650 | 300 | 540 |
| **Total** | 14,150 | 88,790 | 10,826 | 39,220 |
| Estimated inventory, February 1 | 420 | 580 | 250 | 660 |
| **Total units to be purchased** | 13,730 | 88,210 | 10,576 | 38,560 |
| **Unit price** | $12.00 | $7.00 | $3.00 | $4.50 |
| **Total direct materials to be purchased** | $164,760 | $617,470 | $31,728 | $173,430 |
### 4. Direct Labor Cost Budget for February:
**Royal Furniture Company**
**Direct Labor Cost Budget**
**For the Month Ending February 28**
| Line Item Description | Framing Department | Cutting Department | Upholstery Department | Total |
|---------------------------|--------------------|--------------------|-----------------------|--------|
| Hours required for production: | | | | |
| **King** | 1,560 | 650 | 1,040 | 3,250 |
| **Prince** | 1,490 | 596 | 894 | 2,980 |
| **Total** | 3,050 | 1,246 | 1,934 | 6,230 |
| Hourly rate | $12 | $14 | $15 | |
| **Total direct labor cost** | $36,600 | $17,444 | $29,010 | $83,054|
This concludes the preparation of the budgets. Make sure to review all calculations and ensure correctness in your business plans and financial expectations.
### 1. Sales Budget for February:
**Royal Furniture Company**
**Sales Budget**
**For the Month Ending February 28**
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
|--------------------------|-------------------|--------------------|--------------|
| **King:** | | | |
| Northern Domestic | 610 | $780 | $475,800 |
| Southern Domestic | 340 | $780 | $265,200 |
| International | 360 | $850 | $306,000 |
| **Total King** | **1,310** | | **$1,047,000** |
| **Prince:** | | | |
| Northern Domestic | 750 | $550 | $412,500 |
| Southern Domestic | 440 | $550 | $242,000 |
| International | 290 | $600 | $174,000 |
| **Total Prince** | **1,480** | | **$828,500** |
| **Total Revenue from Sales** | | | **$1,875,500** |
### 2. Production Budget for February:
**Royal Furniture Company**
**Production Budget**
**For the Month Ending February 28**
| Line Item Description | Units |
|---------------------------------|-------|
| **King** | |
| Expected units to be sold | 1,310 |
| Desired inventory, February 28 | 80 |
| **Total units available** | 1,390 |
| Estimated inventory, February 1 | 90 |
| **Total units to be produced** | 1,300 | *(1,390 - 90)* |
| Line Item Description | Units |
|---------------------------------|-------|
| **Prince** | |
| Expected units to be sold | 1,480 |
| Desired inventory, February 28 | 35 |
| **Total units available** | 1,515 |
| Estimated inventory, February 1 | 25 |
| **Total units to be produced** | 1,490 | *(1,515 - 25)* |
### 3. Direct Materials Purchases Budget for February:
**Royal Furniture Company**
**Direct Materials Purchases Budget**
**For the Month Ending February 28**
| Line Item Description | Direct Materials Fabric (sq. yds.) | Direct Materials Wood (linear ft.) | Direct Materials Filler (cu. ft.) | Direct Materials Springs (units) |
|-----------------------------------|------------------------------------|--------------------------------------|-------------------------------------|----------------------------------|
| Total required units for production: | | | | |
| **King** | 7,800 | 49,400 | 5,460 | 20,800 |
| **Prince** | 5,960 | 38,740 | 5,066 | 17,880 |
| **Total Required** | 13,760 | 88,140 | 10,526 | 38,680 |
| Desired inventory, February 28 | 390 | 650 | 300 | 540 |
| **Total** | 14,150 | 88,790 | 10,826 | 39,220 |
| Estimated inventory, February 1 | 420 | 580 | 250 | 660 |
| **Total units to be purchased** | 13,730 | 88,210 | 10,576 | 38,560 |
| **Unit price** | $12.00 | $7.00 | $3.00 | $4.50 |
| **Total direct materials to be purchased** | $164,760 | $617,470 | $31,728 | $173,430 |
### 4. Direct Labor Cost Budget for February:
**Royal Furniture Company**
**Direct Labor Cost Budget**
**For the Month Ending February 28**
| Line Item Description | Framing Department | Cutting Department | Upholstery Department | Total |
|---------------------------|--------------------|--------------------|-----------------------|--------|
| Hours required for production: | | | | |
| **King** | 1,560 | 650 | 1,040 | 3,250 |
| **Prince** | 1,490 | 596 | 894 | 2,980 |
| **Total** | 3,050 | 1,246 | 1,934 | 6,230 |
| Hourly rate | $12 | $14 | $15 | |
| **Total direct labor cost** | $36,600 | $17,444 | $29,010 | $83,054|
This concludes the preparation of the budgets. Make sure to review all calculations and ensure correctness in your business plans and financial expectations.
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