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.
July 5,000 desk-and-chair sets
August 6,000 desk-and-chair sets
September 7,500 desk-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 $60. Pine planks cost $0.60 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 $21.00 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.
Required:
Complete the following budget schedules.
1. Sales budget:
2. Production budget (in sets):
3. Raw material purchases:
4. Direct-labor budget:

The following formulas should be used:

1) Production Budget = Sales + Desired Ending Inventory - Opening Inventory

2) Sales Budget= Sales × Price Per unit

3) Raw Materials Budget = Production + Desired Ending Inventory -Opening Inventory

Raw Materials Costs= Raw Materials Budget × Costs

4) Direct Labor Hours Budget = Production × Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget × Wages Per Hour

School Days Furniture, Inc.

Production Budget

                                    July               August               September

Sales                            5000              6000                   7500

+ Desired

Ending Inventory        1200               1500                  

Less Opening

Inventory                    1000               1200                     1500            

Production Budget    5200                6300                   9000        

School Days Furniture, Inc.

Sales Budget

                                     July                August             September

Sales                            5000              6000                   7500

Price Per unit                 $ 60              $60                     $ 60                    

Sales Budget            $ 300,000          $ 360,000             $ 450,000      

School Days Furniture, Inc.

Raw Materials Budget

                                    July               August               September

Production Budget         5200                6300                   9000    

+ Desired

Ending Inventory             630                   900      

Less Opening

Inventory                        520                   630                   900          

Materials Requirement    5310                6570                  8100  

Board (feet)                      10                      10                           10          

Direct Materials          53,100             65,700                 81,000

Plank Costs                  0.60                 0.60                        0.60        

Direct Materials          $ 31860            $ 39,420                $ 48,600    

School Days Furniture, Inc.

Direct Labor Budget

                                    July               August               September

Production Budget         5200                6300                   9000    

Direct Labor hours          1.5                     1.5                       1.5        

Direct Labor Hours        7800                9450                  13500

Wages Per hour              $ 21                 $ 21                     $21

Direct Labor Budget   $ 163,800         $ 198450          $ 283,500  

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Production Budget ( July August September)  5200,  6300,    9000        

Sales Budget   ( July August September)  $ 300,000   $ 360,000  $ 450,000      

Direct Materials Budget ( July August September) $ 31860   $ 39,420                $ 48,600    

Direct Materials Units  Budget   ( July August September)  53,100             65,700    81,000

Direct Labor Budget  ( July August September)  $ 163,800  $ 198450  $ 283,500  

Direct Labor Hours Budget  ( July August September)7800  9450     13500

Explanation:

The formula used are

1) Production Budget = Sales + Desired Ending Inventory Less Opening Inventory

2) Sales Budget= Sales * Price Per unit

3) Raw Materials Budget = Production + Desired Ending Inventory Less Opening Inventory

Raw Materials Costs= Raw Materials Budget * Costs

4) Direct Labor Hours Budget = Production * Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget* Wages Per Hour

School Days Furniture, Inc.

Production Budget

                                     July               August               September

Sales                            5000              6000                   7500

+ Desired

Ending Inventory        1200               1500                     (assuming zero inv)

Less Opening

Inventory                    1000               1200                     1500            

Production Budget    5200                6300                   9000        

Production Budget = Sales + Desired Ending Inventory Less Opening Inventory

School Days Furniture, Inc.

Sales Budget

                                      July                August             September

Sales                            5000              6000                   7500

Price Per unit                 $ 60              $60                     $ 60                    

Sales Budget            $ 300,000          $ 360,000             $ 450,000      

Sales Budget= Sales * Price Per unit

School Days Furniture, Inc.

Raw Materials Budget

                                     July               August               September

Production Budget         5200                6300                   9000    

+ Desired

Ending Inventory             630                   900      (assuming zero inv)

Less Opening

Inventory                        520                   630                   900          

Materials Requiremnt    5310                6570                  8100  

Board (feet)                      10                      10                           10          

Direct Materials          53,100             65,700                 81,000

Plank Costs                  0.60                 0.60                        0.60        

Direct Materials          $ 31860            $ 39,420                $ 48,600    

Raw Materials Budget = Production + Desired Ending Inventory Less Opening Inventory

Raw Materials Costs= Raw Materials Budget * Costs

School Days Furniture, Inc.

Direct Labor Budget

                                     July               August               September

Production Budget         5200                6300                   9000    

Direct Labor hours          1.5                     1.5                       1.5        

Direct Labor Hours        7800                9450                  13500

Wages Per hour              $ 21                 $ 21                     $21

Direct Labor Budget   $ 163,800         $ 198450          $ 283,500  

Direct Labor Hours Budget = Production * Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget* Wages Per Hour