Question

Sales, Production, Direct Materials Purchases, and Direct Labor Cost

The budget director of Royal British 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 March is summarized as follows:

a. Estimated sales of William and Kate chairs for March by sales territory:

Eastern Domestic:
	William	8,500 units at $800 per unit
	Kate	6,000 units at $650 per unit
Western Domestic:
	William	6,000 units at $700 per unit
	Kate	6,000 units at $550 per unit
International:
	William	3,000 units at $600 per unit
	Kate	1,000 units at $350 per unit

b. Estimated inventories at March 1:

Direct materials:				Finished products:
Fabric		5,500	sq. yds.	William	1,500	units
Wood		13,700	lineal ft.	Kate	300	units
Filler		3,800	cu. ft.
Springs		3,500	units

c. Desired inventories at March 31:

Direct materials:				Finished products:
Fabric		9,000	sq. yds.	William	2,000	units
Wood		20,000	lineal ft.	Kate	900	units
Filler		5,000	cu. ft.
Springs		7,500	units

d. Direct materials used in production:

In manufacture of William:
Fabric		4.0	sq. yds. per unit of product
Wood		16	lineal ft. per unit of product
Filler		3.8	cu. ft. per unit of product
Springs		14	units per unit of product
In manufacture of Kate:
Fabric		2.5	sq. yds. per unit of product
Wood		12	lineal ft. per unit of product
Filler		3.2	cu. ft. per unit of product
Springs		10	units per unit of product

e. Anticipated purchase price for direct materials:

Fabric		$9.00	per sq. yd.		Filler		$1.50	per cu. ft.
Wood		5.00	per lineal ft.		Springs		2.00	per unit

f. Direct labor requirements:

William:
Framing Department		2.5 hrs. at $15 per hr
Cutting Department		1.0 hr. at $12 per hr.
Upholstery Department		3.0 hrs. at $16 per hr.
Kate:
Framing Department		1.5 hrs. at $15 per hr.
Cutting Department		0.5 hr. at $12 per hr.
Upholstery Department		2.0 hrs. at $16 per hr.

Required:

1. Prepare a sales budget for March.

Royal British Furniture Company
Sales Budget
For the Month Ending March 31
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
William:
Eastern Domestic		$	$
Western Domestic
International
Total			$
Kate:
Eastern Domestic		$	$
Western Domestic
International
Total			$
Total revenue from sales			$

Answer 1

Please refer to the following table:

Total Sales = Unit Sales Volume * Unit Selling Price

Total sales for William (or Kate) = Total Sales for (Eastern Domestic + Western Domestic + International)

Total Revenue from Sales = Total Sales for William chairs + Total Sales for Kate chairs

Royal Furniture Company
Sales Budget
For the Month of March
Product and Area	Unit Sales	Unit Selling	Total Sales
Volume	Price
William:
	Eastern Domestic	8500	800	68,00,000.00
	Western Domestic	6000	700	42,00,000.00
	International	3000	600	18,00,000.00
	Total			1,28,00,000.00
Kate:
	Eastern Domestic	6000	650	39,00,000.00
	Western Domestic	6000	550	33,00,000.00
	International	1000	350	3,50,000.00
	Total			75,50,000.00
Total revenue from sales	2,03,50,000.00