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 is summarized as follows:a. Estimated sales of King and Prince chairs for February by sales territory:Northern Domestic: King610 units at $780 per unit Prince750 units at $550 per unitSouthern Domestic: King340 units at $780 per unit Prince440 units at $550 per unitInternational: King360 units at $850 per unit Prince290 units at $600 per unitb. Estimated inventories at February 1:Direct materials: Fabric420 sq. yds. Wood580 linear ft. Filler250 cu. ft. Springs660 unitsFinished products: King90 units Prince25 unitsc. Desired inventories at February 28:Direct materials: Fabric390 sq. yds. Wood650 linear ft. Filler300 cu. ft. Springs540 unitsFinished products: King80 units Prince35 unitsd. Direct materials used in production:In manufacture of King: Fabric6.0 sq. yds. per unit of product Wood38 linear ft. per unit of product Filler4.2 cu. ft. per unit of product Springs16 units per unit of productIn manufacture of Prince: Fabric4.0 sq. yds. per unit of product Wood26 linear ft. per unit of product Filler3.4 cu. ft. per unit of product Springs12 units per unit of producte. Anticipated purchase price for direct materials:Fabric$12.00per sq. yd.Wood7.00per linear ft.Filler$3.00per cu. ft.Springs4.50per unitf. Direct labor requirements:King: Framing Department1.2 hrs. at $12 per hr. Cutting Department0.5 hr. at $14 per hr. Upholstery Department0.8 hr. at $15 per hr.Prince: Framing Department1.0 hr. at $12 per hr. Cutting Department0.4 hr. at $14 per hr. Upholstery Department0.6 hr. at $15 per hr. Required: Royal Furniture CompanySales BudgetFor the Month Ending February 28Unit SalesUnit SellingProduct and AreaTotal SalesVolumePriceKing:Northern DomesticSouthern DomestiInternationalTotalPrince:Northern DomesticSouthern DomesticInternationalTotalTotal revenue from salesRoyal Furniture CompanyProduction BudgetFor the Month Ending February 28UnitsKingPrince

Solution:- Preparation of sales budget as follows:-

Answered: Royal Furniture Company Sales Budget…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

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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 is summarized as follows:

a. Estimated sales of King and Prince chairs for February by sales territory:

Northern Domestic:
King	610 units at $780 per unit
Prince	750 units at $550 per unit
Southern Domestic:
King	340 units at $780 per unit
Prince	440 units at $550 per unit
International:
King	360 units at $850 per unit
Prince	290 units at $600 per unit

b. Estimated inventories at February 1:

Direct materials:
Fabric	420 sq. yds.
Wood	580 linear ft.
Filler	250 cu. ft.
Springs	660 units
Finished products:
King	90 units
Prince	25 units

c. Desired inventories at February 28:

Direct materials:
Fabric	390 sq. yds.
Wood	650 linear ft.
Filler	300 cu. ft.
Springs	540 units
Finished products:
King	80 units
Prince	35 units

d. Direct materials used in production:

In manufacture of King:
Fabric	6.0 sq. yds. per unit of product
Wood	38 linear ft. per unit of product
Filler	4.2 cu. ft. per unit of product
Springs	16 units per unit of product
In manufacture of Prince:
Fabric	4.0 sq. yds. per unit of product
Wood	26 linear ft. per unit of product
Filler	3.4 cu. ft. per unit of product
Springs	12 units per unit of product

e. Anticipated purchase price for direct materials:

Fabric	$12.00	per sq. yd.
Wood	7.00	per linear ft.
Filler	$3.00	per cu. ft.
Springs	4.50	per unit

f. Direct labor requirements:

King:
Framing Department	1.2 hrs. at $12 per hr.
Cutting Department	0.5 hr. at $14 per hr.
Upholstery Department	0.8 hr. at $15 per hr.
Prince:
Framing Department	1.0 hr. at $12 per hr.
Cutting Department	0.4 hr. at $14 per hr.
Upholstery Department	0.6 hr. at $15 per hr.

Required:

Royal Furniture Company
Sales Budget
For the Month Ending February 28
Unit Sales
Unit Selling
Product and Area
Total Sales
Volume
Price
King:
Northern Domestic
Southern Domesti
International
Total
Prince:
Northern Domestic
Southern Domestic
International
Total
Total revenue from sales
Royal Furniture Company
Production Budget
For the Month Ending February 28
Units
King
Prince

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