Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and

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 May June 10,000 d 12,000 desk-and-chair sets 15,000 desk-and-chair sets esk-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.

Explanation / Answer

Required Budget schedules are as prepared below basis the information goiven.

Note : July sales is not given so June data is not complete.

1. Sales Budget Scholastic Furniture Inc. Sales Budget For the quarter ended June 30 Month Particulars April May June Total Sale Units (a) 10,000 12,000 15,000 37,000 *Price per unit (b) $50 $50 $50 $50 Total Sales (a*b) $500,000 $600,000 $750,000 1,850,000 2. Production Budget Scholastic Furniture Inc. Production Budget For the quarter ended June 30 Month Particulars April May June Total Sale Units (a) 10,000 12,000 15,000 37,000 Planned ending units (b) 2,400 3,000 0 Beginning units (c ) 2,000 2,400 3,000 2,000 Planned production units (d)= (a+b-c) 10,400 12,600 12,000 35,000 3. Raw material Budget Scholastic Furniture Inc. Raw Material Purchase Budget For the quarter ended June 30 Month Particulars April May June Total Planned production units (a) 10,400 12,600 12,000 35,000 *Direct Material required per unit (b) 10.0 10.0 10.0 10.0 Direct Material Required for production (c ) 104,000 126,000 120,000 350,000 Budgeted ending Direct Material (d) 12,600 12,000 0 837 Beginning Direct Material (e ) 10,400 12,600 12,000 675 Budgeted direct material purchase f= c+d-e 106,200 125,400 108,000 350,162 Cost per unit (g) $0.5 $0.5 $0.5 $0.5 BudgetedDM purchases $53,100 $62,700 $54,000 175,081 4. Direct labour Budget Scholastic Furniture Inc. Direct Labour Budget For the quarter ended June 30 Month Particulars April May June Total Planned production units (a) 10,400 12,600 12,000 35,000 *Direct labour required per unit (b) 1.5 1.5 1.5 1.5 Budgeted Direct labour hours 15,600 18,900 18,000 52,500 Cost per direct labour hour 20 20 20 20 Budgeted Direct labour Cost $312,000 $378,000 $360,000 $1,050,000

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