Question

Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units that are sold to public school systems throughout the Midwest. The controller of the company’s Desk Division is currently preparing a budget for the second quarter of the year. The following sales forecast has been made by the division’s sales manager.

April	10,000	desk-and-chair sets
May	12,000	desk-and-chair sets
June	15,000	desk-and-chair sets

Each desk-and-chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $50. Pine planks cost $.50 per board foot, and the division ends each month with enough wood to cover 10 percent of the next month’s production requirements. The division incurs a cost of $20 per hour for direct-labor wages and fringe benefits. The division ends each month with enough finished-goods inventory to cover 20 percent of the next month’s sales.

Required:

Complete the following budget schedules.

1. Sales budget.

2. Production budget (in sets).

3. Raw-material purchases.

4. Direct-labor budget.

   Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Production budget (in sets): May June Sales Add: Desired ending inventory Total requirements Less: Projected beginning inventory Planned production April 10,000 2,400 12,400 3,000 3,000 2,000 10,400 3,000

Answer 1

Production budget

	April	May	June
Sales	10000	12000	15000
Add: Desired ending inventory	2400	3000
Total requirements	12400	15000
Less: Projected beginning inventory	-2000	-2400
Planned production	10400	12600