Completion of Budget Schedules
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 | 12,000desk-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 10percent of the next month’s production requirements. The division incurs a cost of S20 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.
l.Salesbudget: | |||
| April | May | June |
Sales (insets) | 10.000 |
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Sales price per set | ×$50 |
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Sales revenue | $500,000 |
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2.Production budget (insets): | |||
| April | May | June |
Sales | 10,000 |
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Add: Desired ending inventory | 2,400 |
| 3,000 |
Total requirements | 12,400 |
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Less: Projected beginning inventory | 2,000 |
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Planned production | 10,400 |
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3.Raw-materialpurchases: | |||
| April | May | June |
Planned production (sets) | 10.400 |
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Raw material required per set (board feet) | × 10 |
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Raw material required for production (board feet) | 104,000 |
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Add: Desired ending inventory of raw material, in board feet (10% of next month's requirement) | 12,600 |
| 16,000 |
Total requirements | 116,600 |
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Planned purchases of raw material(board feet) | 106,200 |
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Cost per board foot | × $.50 |
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Planned purchases of raw material (dollars) | $53,100 |
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4. Direct-laborbudget: | |||
| April | May | June |
Planned production(sets) | 10,400 |
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Direct-labor hours per set | × 1.5 |
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Direct-labor hours required | 15,600 |
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Cost per hour | × $20 |
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Planned direct-labor cost | $312,000 |
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5. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following information changes: each set sells for $55 and the direct-labor cost per hour is $21.
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