In: Accounting
Scholastic Furniture, Inc. manufactures a variety of desks,
chairs, tables, and shelf units that are sold to public school
systems throughout the Midwest. The controller of the company’s
Desk Division is currently preparing a budget for the second
quarter of the year. The following sales forecast has been made by
the division’s sales manager.
April | 10,000 | desk-and-chair sets |
May | 12,000 | desk-and-chair sets |
June | 15,000 | 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 $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 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.
Sales budget.
Production budget (in sets).
Raw-material purchases.
Direct-labor budget.
Note : In the absence of data for the budgeted sales of the month of july ,we have assumed it to be same as that of june .
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