*Problem 5-32 Aaron Furniture builds high-end hand-made dining tables. Attacus S

Question

*Problem 5-32 Aaron Furniture builds high-end hand-made dining tables. Attacus Simmons, the company's owner, has developed the following sales forecast for 2018. 1st Quarter 2,500 2nd Quarter 2,700 3rd quarter 2,900 4th Quarter 2,200 Forecasted sales (tables) Because of the time needed to create each table, Aaron maintains an ending Finished Goods Inventory of 20% of the following quarter's budgeted sales. Aaron has been following this inventory policy for several years. The company ended 2017 with 500 tables on hand. The standard cost card for a table is as follows: Standard Total Standard Cost Standard Quantity 25 board feet 4 squares 12 DLH 12 DLH 12 DLH Price 5yboard foot American cherry wood American cherry turning square (legs) Direct labor Variable overhead Fixed overhead 10/square $18/DLH $60/DLH $10/DLH $125 40 216 720 120 $1,221 Prepare Aaron's production budget for 2018, Assume that the desired ending inventory for 2018 is 600 tables. (Round answers to O decimal places, e.g. 5,275.) Production Budget 1st Quarter 2nd Quarter 3'd Quarter 4th Quarter Annual

Explanation / Answer

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Production Budget Q1 Q2 Q3 Q4 Annual Forcasted Sales 2500 2700 2900 2200 10300 Add: Desired Closing Stock(20% of Next Qtr Sales) 540 580 440 600 600 Total Requirement 3040 3280 3340 2800 10900 Less: Opening Stock 500 540 580 440 500 Net Production Plan 2540 2740 2760 2360 10400 Direct Material Purchase Budget Q1 Q2 Q3 Q4 Annual Material Requirement(Productn*PU requirement25) 63500 68500 69000 59000 260000 Add: Desired Closing Stock(10% of Next Qtr Req) 6850 6900 5900 10000 10000 Total Requirement 70350 75400 74900 69000 270000 Less: Opening Stock 5500 6850 6900 5900 5500 Net DM Purchase Requirement 64850 68550 68000 63100 264500 Direct Labor Budget Q1 Q2 Q3 Q4 Annual Net Production Plan 2540 2740 2760 2360 10400 Direct Labor Requirement PU 12 12 12 12 12 Total Direct Labor Hour Needed 30480 32880 33120 28320 124800 Direct Labor Rate PH 18 18 18 18 18 Total Direct Labor in Value 548640 591840 596160 509760 2246400 Direct Labor Budget Q1 Q2 Q3 Q4 Annual Net Production Plan 2540 2740 2760 2360 10400 Direct Labor Requirement PU 12 12 12 12 12 Total Direct Labor Hour Needed 30480 32880 33120 28320 124800 Total Normal Hours of Workers(60*500) 30000 30000 30000 30000 30000 Additional Work Hours required 480 2880 3120 0 94800 Normal Wage Rate of Worker 18 18 18 18 18 Special Wage Rate of Worker 27 27 27 27 27 Wages for Normal working hours 540000 540000 540000 509760 2129760 Special Wage Rate of Worker 12960 77760 84240 0 174960 Total Direct Labor Cost 552960 617760 624240 509760 2304720

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