The budget director of Peaky Blinders Furniture Company requests estimates of sales, production, and other operating data every month. Selected information concerning sales and production for March is summarized as follows:   Estimated sales of Thomas and Polly chairs for March by sales territory: Birmingham Data Thomas 8,000 units at $900 per unit Polly 7,000 units at $700 per unit   London Data Thomas 6,000 units at $800 per unit Polly 5,500 units at $650 per unit   International Data Thomas 3,000 units at $600 per unit Polly 1,000 units at $350 per unit Estimated inventories at March 1: Direct Materials Data     Fabric 2,750 sq. yds.       Wood 6,850 lineal ft.     Filler 1,900 cu. ft.         Springs 3,500 units        Finished Products Units Completed     Thomas 750 units     Polly 150 units Desired inventories at March 31: Direct Materials Data     Fabric 4,500 sq. yds.       Wood 10,000 lineal ft.     Filler 2,500 cu. ft.         Springs 7,500 units        Finished Products Units Completed     Thomas 1,000 units     Polly 450 units Direct materials used in production: In manufacture of Thomas Data     Fabric 2.0 sq. yds. per unit of product        Wood 8 lineal ft. per unit of product      Filler 3.8 cu. ft. per unit of product          Springs 7 units per unit of product         In manufacture of Polly Data     Fabric 2.5 sq. yds. per unit of product      Wood 6 lineal ft. per unit of product     Filler 3.2 cu. ft. per unit of product         Springs 5 units per unit of product      Anticipated purchase price for direct materials: Department Data Fabric $10.00 per sq. yd.    Wood 5.00 per lineal ft. Filler $1.50 per cu. ft.     Springs 3.00 per unit        Direct labor requirements: Thomas Data     Framing Department 2.5 hrs. at $30 per hr.     Cutting Department 1.0 hr. at $24 per hr.     Upholstery Department 3.0 hrs. at $32 per hr.   Polly Data     Framing Department 1.5 hrs. at $30 per hr.     Cutting Department 0.5 hr. at $24 per hr.     Upholstery Department 2.0 hrs. at $32 per hr. Required: Prepare a sales budget for March. Prepare a production budget for March. Prepare a direct materials purchases budget for March. Prepare a direct labor cost budget for March.

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
Problem 2PB: Sales, production, direct materials purchases, and direct labor cost budgets The budget director of...
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The budget director of Peaky Blinders Furniture Company requests estimates of sales, production, and other operating data every month. Selected information concerning sales and production for March is summarized as follows:

 

  1. Estimated sales of Thomas and Polly chairs for March by sales territory:

Birmingham

Data

Thomas

8,000 units at $900 per unit

Polly

7,000 units at $700 per unit

 

London

Data

Thomas

6,000 units at $800 per unit

Polly

5,500 units at $650 per unit

 

International

Data

Thomas

3,000 units at $600 per unit

Polly

1,000 units at $350 per unit

  1. Estimated inventories at March 1:

Direct Materials

Data

    Fabric

2,750 sq. yds.  

    Wood

6,850 lineal ft.

    Filler

1,900 cu. ft.    

    Springs

3,500 units     

 

Finished Products

Units Completed

    Thomas

750 units

    Polly

150 units

  1. Desired inventories at March 31:

Direct Materials

Data

    Fabric

4,500 sq. yds.  

    Wood

10,000 lineal ft.

    Filler

2,500 cu. ft.    

    Springs

7,500 units     

 

Finished Products

Units Completed

    Thomas

1,000 units

    Polly

450 units

  1. Direct materials used in production:

In manufacture of Thomas

Data

    Fabric

2.0 sq. yds. per unit of product   

    Wood

8 lineal ft. per unit of product 

    Filler

3.8 cu. ft. per unit of product     

    Springs

7 units per unit of product      

 

In manufacture of Polly

Data

    Fabric

2.5 sq. yds. per unit of product 

    Wood

6 lineal ft. per unit of product

    Filler

3.2 cu. ft. per unit of product    

    Springs

5 units per unit of product     

  1. Anticipated purchase price for direct materials:

Department

Data

Fabric

$10.00 per sq. yd.   

Wood

5.00 per lineal ft.

Filler

$1.50 per cu. ft.    

Springs

3.00 per unit       

  1. Direct labor requirements:

Thomas

Data

    Framing Department

2.5 hrs. at $30 per hr.

    Cutting Department

1.0 hr. at $24 per hr.

    Upholstery Department

3.0 hrs. at $32 per hr.

 

Polly

Data

    Framing Department

1.5 hrs. at $30 per hr.

    Cutting Department

0.5 hr. at $24 per hr.

    Upholstery Department

2.0 hrs. at $32 per hr.

Required:

  1. Prepare a sales budget for March.
  2. Prepare a production budget for March.
  3. Prepare a direct materials purchases budget for March.
  4. Prepare a direct labor cost budget for March.
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4. Prepare a direct labor cost budget for March. FOLLOW UP for question #4

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