Prepare production and direct labour budgets. 13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: January 15,000 $85 2 $18 February March April May 18,000 13,000 14,000 14,000 $75 $75 $75 $75 2 1.5 1.5 1.5 $18 $18 $20 $20 Estimated unit sales Sales price per unit Direct labour hours per unit Wage per direct labour hour Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on April 1. It has installed new labour-saving machinery, which will be fully operational by March 1. Raddington Inc. expects to begin the year with 24,000 chairs on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales plus 50% of the next month's sales. Instructions a. Prepare a production budget and a direct labour budget for Raddington Inc. by month and for the first quarter of the year. The direct labour budget should include direct labour hours and show the detail for each direct labour cost category. a. Production for February: 13,500 units; direct labour total: $1,422,000 b. For each item used in Raddington Inc.'s production budget and its direct labour budget, identify the other component(s) of the master budget (budget package) that would also use these data.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Prepare production and direct labour budgets.
13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is
responsible for preparing the master budget and has accumulated the following
information for 2022:
January
15,000
$85
2
$18
February March April May
18,000 13,000 14,000 14,000
$75 $75 $75
$75
2
1.5 1.5
1.5
$18
$18
$20
$20
Estimated unit sales
Sales price per unit
Direct labour hours per unit
Wage per direct labour hour
Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on
April 1. It has installed new labour-saving machinery, which will be fully operational
by March 1.
Raddington Inc. expects to begin the year with 24,000 chairs on hand and has a policy
of carrying an end-of-month inventory of 100% of the following month's sales plus
50% of the next month's sales.
Instructions
a. Prepare a production budget and a direct labour budget for Raddington Inc. by
month and for the first quarter of the year. The direct labour budget should
include direct labour hours and show the detail for each direct labour cost
category.
a. Production for February: 13,500 units; direct labour total: $1,422,000
b. For each item used in Raddington Inc.'s production budget and its direct labour
budget, identify the other component(s) of the master budget (budget package)
that would also use these data.
Transcribed Image Text:Prepare production and direct labour budgets. 13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: January 15,000 $85 2 $18 February March April May 18,000 13,000 14,000 14,000 $75 $75 $75 $75 2 1.5 1.5 1.5 $18 $18 $20 $20 Estimated unit sales Sales price per unit Direct labour hours per unit Wage per direct labour hour Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on April 1. It has installed new labour-saving machinery, which will be fully operational by March 1. Raddington Inc. expects to begin the year with 24,000 chairs on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales plus 50% of the next month's sales. Instructions a. Prepare a production budget and a direct labour budget for Raddington Inc. by month and for the first quarter of the year. The direct labour budget should include direct labour hours and show the detail for each direct labour cost category. a. Production for February: 13,500 units; direct labour total: $1,422,000 b. For each item used in Raddington Inc.'s production budget and its direct labour budget, identify the other component(s) of the master budget (budget package) that would also use these data.
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