question archive School Days Furniture, Inc
School Days Furniture, Inc
Subject:AccountingPrice:4.87 Bought7
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School Days Furniture, Inc., manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school systems throughout the midwest. The controller of the company’s Desk Division is currently preparing a budget for the third quarter of the year. The following sales forecast has been made by the division’s sales manager. |
| april1 | 10,000 | desk-and-chair sets |
| may | 12000 | desk-and-chair sets |
| june | 15000 | desk-and-chair sets |
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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 $20.00 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. |
The Following Budget Schedules. 1. Sales Budget: 2. Production Budget (In Sets): 3. Raw-Material Purchases: 4. Direct-Labor Budget:
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Answer:
Required Budget schedules are as prepared below basis the information goiven.
| 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 |
Note : July sales is not given so June data is not complete.
