Question

Sales, Production, Direct Materials Purchases, and Direct Labor Cost The budget director of Royal British 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: a. Estimated sales of William and Kate chairs for March by sales territory: Eastern Domestic: William 8,000 units at $800 per unit Kate 6,000 units at $650 per unit Western Domestic: William 6,000 units at $700 per unit Kate 7,000 units at $550 per unit International: William 4,500 units at $600 per unit Kate 1,000 units at $350 per unit b. Estimated Inventories at March 1: Finished products: Direct materials: Fabric 5,500 sq yds William 1,500 units

Answer 1

Kate Units 2. Production Budget for March Royal British Furniture Company Production Budget For the Month Ending March 31 William Units Expected units to be sold 18,500 Plus desired inventory, March 31 2,000 Total 20,500 Less Estimated inventory, March 31 1,500 Total units to be produced 19,000 14,000 900 14,900 300 14,600 Working Notes: Expected units to be sold Kate Units Eastern Domestic Western Domestic International Expected units to be sold William Units 8,000 6,000 4,500 18,500 6,000 7,000 1,000 14,000

3) Direct materials purchase budget Royal British Furniture Company Direct Materials Purchases Budget For the Month Ending March 31 Fabric (Sq.Yards) Wood (lineal ft.) Filler (cu.ft.) Springs (units) | Total Required Units for production William Kate Plus desired inventory, March 31 Total Less estimated Inventory, March 1 Total unis to be produced Unit price Total direct materials to be purchased 76,000 36,500 9,000 121,500 5,500 116,000 9.00 1,044,000 304,000 175,200 20,000 499,200 13,700 485,500 5.00 2,427,500 72,200 46,720 5,000 123,920 3,800 120,120 1.50 180, 180 266,000 146,000 7,500 419,500 3,500 416,000 2.00 832,000 $ $ $ $ $ $ $ 190 $ 4,483,680 Working Notes Williams Fabric (Sq.Yards) Wood (lineal ft.) Expected Production of Finished goods (a) | 19,000 19,000 Direct materials used per unit (b) 4.0 16.0 Total Direct material used (a xb) 76,000 304,000 Filler (cu.ft.) 19,000 3.8 72,200 Springs (units) 19,000 14.0 266,000 Kate Expected Production of Finished goods (a) Direct materials used per unit (b) Total Direct material used (axb) Fabric (Sq.Yards) Wood (lineal ft.) 14,600 14,600 12.0 36,500 175,200 Filler (cu.ft.) 14,600 _ 3.2 Springs (units) 14,600 10.0 146,000 2.5 46,720

4. Direct Labor Cost Budget Royal British Furniture Company Direct Labor cost Budget For the Month Ending March 31 Framing Cutting Department Department Upholstery Department Total Hours required for production William Kate Total Hourly rate Total direct labor 47,500 21,900 69,400 15 $ 1,041,000 $ 19,000 7,300 26,300 12 315,600 57,000 29,200 86,200 16 1,379,200 $ $ $ $ 2,735,800 Working Notes Framing William Department Expected Production of Finished goods (a) 19,000 Direct labor hours per unit (b) 2.5 Hours required for production (a xb) 47,500 Cutting Department 19,000 1.0 19,000 Upholstery Department 19,000 3.0 57,000 Kate Expected Production of Finished goods (a) Direct labor hours per unit (b) Hours required for production (axb) Framing Department 14,600 1.5 Cutting Upholstery Department Department 14,600 14,600 0.5 2.0 7,300 29,200 21,900