Question

Autorent 2 ACCM Wond EndNote X7 Tell me what you want to do 9. I Aalbot Aalbot AaBb T Normal 1 No Space Healing AaBbc AaB Aabel laber Aalber AaBbce Heading 2 Title Subtitle Subtle Em E mphasis intense Problem 4) Operating budget for a manufacturing company Comfort Furniture Corp. manufacturers and sells two types of tables: Regular and Deluxe In July 2017, the company's budget department gathered the following data to prepare 2018 budget. Direct Materials used to produce one table Direct Material Deluxe Unit pound pound each Regular 4 lbs 2 lbs 3 lbs I unit Projected Sales in 2018: Regular Deluxe 60,000 tables at $165/table 40,000 tables at $250/table Target Finished Goods Inventory Regular Deluxe lan. 1. 2018 20,000 tables 8,000 tables Dec 31, 2018 25,000 tables 9,000 tables Target Direct Materials Inventory: Estimated Price Direct Material A $12/1 Direct Material B $ 5/ Direct Material 53/unit lan. 1 2018 32,000 lbs 29,000 lbs 6,000 units Dec 31, 2018 36,000 lbs 32,000 lbs 7,000 units Work-in-process. The company does not expect to have any beginning or ending work-in- process inventory in 2018 Projected direct labor hours and rates for 2018 Regular Hours per chair Rates per hour $12/ Deluxe Manufacturing Overheads are allocated at the rate of $20 per direct Laber-hour Regu ) Prepare the follow

Answer 1

a.	Sales budget:
					Regular	Deluxe	Total
	Projected sales in units			a	60000	40000	100000
	Selling price per unit			b	165	250
	Projected sales in $			a*b	9900000	10000000	19900000
b.	Production:
					Regular	Deluxe	Total
	Projected sales in units				60000	40000	100000
	Add:Finished goods inventory,Dec 31				25000	9000	34000
	Total units needed				85000	49000	134000
	Less:Finished goods inventory,Jan 1				20000	8000	28000
	Units to be produced				65000	41000	106000
c.	Direct material usage (in units & in dollars):
					Direct material A	Direct material B	Direct material C
	Regular:
	Direct material required per unit				4	2	0
	Direct material usage in units			a	260000	130000	0
	(65000* 4 or 2 or 0)
	Direct material cost per unit			b	12	5	3
	Direct material usage in $			c=a*b	3120000	650000	0
	Deluxe:
	Direct material required per unit				5	3	1
	Direct material usage in units			d	205000	123000	41000
	(41000* 5 or 3 or 1)
	Direct material cost per unit			e	12	5	3
	Direct material usage in $			f=d*e	2460000	615000	123000
	Total direct material usage in units			a+d	465000	253000	41000
	Total direct material usage in $			c+f	5580000	1265000	123000
d.					Direct material A	Direct material B	Direct material C
	Total direct material usage in units				465000	253000	41000
	Add:Direct materials inventory,Dec 31				36000	32000	7000
	Total direct material needed				501000	285000	48000
	Less:Direct materials inventory,Jan 1				32000	29000	6000
	Materials to be purchased			a	469000	256000	42000
	Direct material cost per unit			b	12	5	3
	Total direct material cost				5628000	1280000	126000
e.	Direct labor (in dollars)
					Regular	Deluxe	Total
	Units to be produced			a	65000	41000	106000
	Hours per unit			b	2	3
	Total hours required			c=a*b	130000	123000	253000
	Rate per hour			d	12	16
	Direct labor (in dollars)			e=c*d	1560000	1968000	3528000
f.	Manufacturing overhead (in dollars)
					Regular	Deluxe	Total
	Total hours required			a	130000	123000	253000
	Manufacturing overhead rate			b	20	20
	Manufacturing overhead (in dollars)			a*b	2600000	2460000	5060000