Question

Prepare Waterway's production budget for 2018. Assume that the desired ending inventory for 2018 is 560 tables. (Round answers to 0 decimal places, e.g. 5,275.) Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2800 2926 2312 Annual Budgeted unit sales 2544 10582 Budgeted ending inventory v 560 585 462 560 2167 Total units required 3104 3385 3388 2872 12749 Beginning inventory lg inventory (509) Budgeted Production
Waterway Furniture builds high-end hand-made dining tables. Attacus Simmons, the company’s owner, has developed the following sales forecast for 2018.

Because of the time needed to create each table, Waterway maintains an ending Finished Goods Inventory of 20% of the following quarter’s budgeted sales. Waterway has been following this inventory policy for several years. The company ended 2017 with 509 tables on hand.
The standard cost card for a table is as follows:

Because of the time needed to create each table, Waterway maintains an ending Finished Goods Inventory of 20% of the following quarter’s budgeted sales. Waterway has been following this inventory policy for several years. The company ended 2017 with 509 tables on hand.
The standard cost card for a table is as follows:

Answer 1

Production Budget
	Q1	Q2	Q3	Q4	Annual
Budgeted sales units	2544	2800	2926	2312	10582
Add: Desired Ending inventory	560	585	462	560	2167
Total Needs	3104	3385	3388	2872	12749
Less: Beginnng finished inventory	-509	-560	-585	-462	-2116
Budgeted production	2595	2825	2803	2410	10633
Direct Material Purchase Budget
	Q1	Q2	Q3	Q4	Annual
Budgeted production units	2595	2825	2803	2410	10633
Standard board feet	25	25	25	25	25
Production needs	64875	70625	70075	60250	265825
Add: Desired Ending inventory	7062	7007	6025	10032	30126
Total needs	71937	77632	76100	70282	295951
Less: Beginning inventory	-5600	-7062	-7007	-6025	-25694
Purchase units	66337	70570	69093	64257	270257
Cost price per unit	$4	$4	$4	$4	$4
Budgeted prurchase cost in dollars	$265,348	$282,280	$276,372	$257,028	$1,081,028
Direct Labor Budget
	Q1	Q2	Q3	Q4	Annual
Budgeted production units	2595	2825	2803	2410	10633
labor required per unit	12	12	12	12	12
labor hours	31140	33900	33636	28920	127596
Labor rate per hour	$16	$16	$16	$16	$16
Budgeted labor cost	$498,240	$542,400	$538,176	$462,720	$2,041,536
Direct Labor Budget
	Q1	Q2	Q3	Q4	Annual
Labor hours	31140	33900	33636	28920
Guaranteed hours (60 emply. × 500 hours)	30000	30000	30000	30000
Additional time	1140	3900	3636	0	8676
Labor rate (Normal + additional)	$24	$24	$24	$24	$24
Labor cost at higher rate (A)	$27,360	$93,600	$87,264	$0	$208,224
Minimum guaranteed wages @$16	$480,000	$480,000	$480,000	$480,000	$480,000
Budgeted labor cost	$507,360	$573,600	$567,264	$480,000	$688,224