The budget director of Royal Furniture Company requests estimates of sales, prod

Question

The budget director of Royal 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 February 2016 is summarized as follows: a. Estimated sales of King and Prince chairs for February by sales territory: Northern Domestic: 610 units at $780 per unit 750 units at $550 per unit King Prince Southern Domestic: 340 units at $780 per unit 440 units at $550 per unit King Prince International 360 units at $850 per unit 290 units at $600 per unit King Prince

Explanation / Answer

Royal Furniture Company Sales Budget For the Month Ended February 28, 2016 Product and Area Unit Sales Volume Unit Selling Price Total Sales King: Northern Domestic 610 $                  780.00 $        475,800.00 Southern Domestic 340 $                  780.00 $        265,200.00 International 360 $                  850.00 $        306,000.00 Total 1310 $              2,410.00 $    1,047,000.00 Prince: Northern Domestic 750 $                  550.00 $        412,500.00 Southern Domestic 440 $                  550.00 $        242,000.00 International 290 $                  600.00 $        174,000.00 Total 1480 $              1,700.00 $        828,500.00 Total Revenue from sales $    1,875,500.00 Royal Furniture Company Production Budget For the Month Ended February 28, 2016 King Prince Expected Units to be sold 1310 1480 Add: Desired Ending Inventory 80 35 Total 1390 1515 Less: Estimated Beginning Inventory 90 25 Total Units to be produced 1300 1490 Royal Furniture Company Direct Material Purchased Budget For the Month Ended February 28, 2016 Fabric(Sq.Yards) Wood(Linear ft.) Filler(cu.ft.) Springs(units) Required Units for Production Total King=(6*1300) for Febric,(38*1300) for Wood,(4.2*1300) for Filler,(16*1300) for Srings 7800 49400 5460 20800 Prince(4*1490) for Fabric,(26*1490) for Wood,(3.4*1490) for Filler,(12*1490) for Springs 5960 38740 5066 17880 Add: Desired Ending Inventory 390 650 300 540 Total 14150 88790 10826 39220 Less: EstimatedBegining Inventory 420 580 250 660 Total Units to be Produced=(A) 13730 88210 10576 38560 Unit Price=(B) $                        12.00 $                      7.00 $                     3.00 $                 4.50 Total Direct Material to be purchased=(A)*(B) $             164,760.00 $         617,470.00 $          31,728.00 $    173,520.00 $ 987,478.00 Royal Furniture Company Direct Labor Cost Budget For the Month Ended February 28, 2016 Framing Department Cutting Department Upholstery Department Total Hours Required for Production King =(1300*1.2) for Framing Dett,(1300*.50) for Cutting Deptt,(1300*.80) for Upholstery deptt 1560 650 1040 Prince=(1490*1) for Framing Deptt,(1490*.40) for Cutting dett,(1490*.60) for Upholstery Deptt 1490 596 894 Total=(A) 3050 1246 1934 Hourly Rate=(B) $                        12.00 $                    14.00 $                  15.00 Total Direct Labor cost=(A)*(B) $               36,600.00 $            17,444.00 $          29,010.00 $      83,054.00

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