Required: 1. Prepare a sales budget for February. Royal Furniture Company Sales Budget For the Month Ending February 28 Product and Area Unit Sales Volume Unit Selling Price Total Sales King: Northern Domestic fill in the blank 1 fill in the blank 2 fill in the blank 3 Southern Domestic fill in the blank 4 fill in the blank 5 fill in the blank 6 International fill in the blank 7 fill in the blank 8 fill in the blank 9 Total fill in the blank 10 fill in the blank 11 Prince: Northern Domestic fill in the blank 12 fill in the blank 13 fill in the blank 14 Southern Domestic fill in the blank 15 fill in the blank 16 fill in the blank 17 International fill in the blank 18 fill in the blank 19 fill in the blank 20 Total fill in the blank 21 fill in the blank 22 Total revenue from sales fill in the blank 23 2. Prepare a production budget for February. Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince Expected units to be sold fill in the blank 24 fill in the blank 25 Plus desired inventory, February 28 fill in the blank 26 fill in the blank 27 Total units required fill in the blank 28 fill in the blank 29 Less estimated inventory, February 1 fill in the blank 30 fill in the blank 31 Total units to be produced fill in the blank 32 fill in the blank 33 3. Prepare a direct materials purchases budget for February. Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Direct Materials Fabric (sq. yds.) Wood (linear ft.) Filler (cu. ft.) Springs (units) Total Required units for production: King fill in the blank 34 fill in the blank 35 fill in the blank 36 fill in the blank 37 Prince fill in the blank 38 fill in the blank 39 fill in the blank 40 fill in the blank 41 Plus desired inventory, February 28 fill in the blank 42 fill in the blank 43 fill in the blank 44 fill in the blank 45 Total units required fill in the blank 46 fill in the blank 47 fill in the blank 48 fill in the blank 49 Less estimated inventory, February 1 fill in the blank 50 fill in the blank 51 fill in the blank 52 fill in the blank 53 Total units to be purchased fill in the blank 54 fill in the blank 55 fill in the blank 56 fill in the blank 57 Unit price fill in the blank 58 fill in the blank 59 fill in the blank 60 fill in the blank 61 Total direct materials to be purchased fill in the blank 62 fill in the blank 63 fill in the blank 64 fill in the blank 65 fill in the blank 66 4. Prepare a direct labor cost budget for February. Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 Framing Department Cutting Department Upholstery Department Total Hours required for production: King fill in the blank 67 fill in the blank 68 fill in the blank 69 Prince fill in the blank 70 fill in the blank 71 fill in the blank 72 Total hours required fill in the blank 73 fill in the blank 74 fill in the blank 75 Hourly rate fill in the blank 76 fill in the blank 77 fill in the blank 78 Total direct labor cost fill in the blank 79 fill in the blank 80 fill in the blank 81 fill in the blank 82
Required: 1. Prepare a sales budget for February. Royal Furniture Company Sales Budget For the Month Ending February 28 Product and Area Unit Sales Volume Unit Selling Price Total Sales King: Northern Domestic fill in the blank 1 fill in the blank 2 fill in the blank 3 Southern Domestic fill in the blank 4 fill in the blank 5 fill in the blank 6 International fill in the blank 7 fill in the blank 8 fill in the blank 9 Total fill in the blank 10 fill in the blank 11 Prince: Northern Domestic fill in the blank 12 fill in the blank 13 fill in the blank 14 Southern Domestic fill in the blank 15 fill in the blank 16 fill in the blank 17 International fill in the blank 18 fill in the blank 19 fill in the blank 20 Total fill in the blank 21 fill in the blank 22 Total revenue from sales fill in the blank 23 2. Prepare a production budget for February. Royal Furniture Company Production Budget For the Month Ending February 28 Units King Prince Expected units to be sold fill in the blank 24 fill in the blank 25 Plus desired inventory, February 28 fill in the blank 26 fill in the blank 27 Total units required fill in the blank 28 fill in the blank 29 Less estimated inventory, February 1 fill in the blank 30 fill in the blank 31 Total units to be produced fill in the blank 32 fill in the blank 33 3. Prepare a direct materials purchases budget for February. Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 Direct Materials Fabric (sq. yds.) Wood (linear ft.) Filler (cu. ft.) Springs (units) Total Required units for production: King fill in the blank 34 fill in the blank 35 fill in the blank 36 fill in the blank 37 Prince fill in the blank 38 fill in the blank 39 fill in the blank 40 fill in the blank 41 Plus desired inventory, February 28 fill in the blank 42 fill in the blank 43 fill in the blank 44 fill in the blank 45 Total units required fill in the blank 46 fill in the blank 47 fill in the blank 48 fill in the blank 49 Less estimated inventory, February 1 fill in the blank 50 fill in the blank 51 fill in the blank 52 fill in the blank 53 Total units to be purchased fill in the blank 54 fill in the blank 55 fill in the blank 56 fill in the blank 57 Unit price fill in the blank 58 fill in the blank 59 fill in the blank 60 fill in the blank 61 Total direct materials to be purchased fill in the blank 62 fill in the blank 63 fill in the blank 64 fill in the blank 65 fill in the blank 66 4. Prepare a direct labor cost budget for February. Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 Framing Department Cutting Department Upholstery Department Total Hours required for production: King fill in the blank 67 fill in the blank 68 fill in the blank 69 Prince fill in the blank 70 fill in the blank 71 fill in the blank 72 Total hours required fill in the blank 73 fill in the blank 74 fill in the blank 75 Hourly rate fill in the blank 76 fill in the blank 77 fill in the blank 78 Total direct labor cost fill in the blank 79 fill in the blank 80 fill in the blank 81 fill in the blank 82
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets
The budget director of Royal 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 February is summarized as follows:
a. Estimated sales of King and Prince chairs for February by sales territory:
| Northern Domestic: | |
| King | 610 units at $780 per unit |
| Prince | 750 units at $550 per unit |
| Southern Domestic: | |
| King | 340 units at $780 per unit |
| Prince | 440 units at $550 per unit |
| International: | |
| King | 360 units at $850 per unit |
| Prince | 290 units at $600 per unit |
b. Estimated inventories at February 1:
| Direct materials: | |
| Fabric | 420 sq. yds. |
| Wood | 580 linear ft. |
| Filler | 250 cu. ft. |
| Springs | 660 units |
| Finished products: | |
| King | 90 units |
| Prince | 25 units |
c. Desired inventories at February 28:
| Direct materials: | |
| Fabric | 390 sq. yds. |
| Wood | 650 linear ft. |
| Filler | 300 cu. ft. |
| Springs | 540 units |
| Finished products: | |
| King | 80 units |
| Prince | 35 units |
d. Direct materials used in production:
| In manufacture of King: | |
| Fabric | 6.0 sq. yds. per unit of product |
| Wood | 38 linear ft. per unit of product |
| Filler | 4.2 cu. ft. per unit of product |
| Springs | 16 units per unit of product |
| In manufacture of Prince: | |
| Fabric | 4.0 sq. yds. per unit of product |
| Wood | 26 linear ft. per unit of product |
| Filler | 3.4 cu. ft. per unit of product |
| Springs | 12 units per unit of product |
e. Anticipated purchase price for direct materials:
| Fabric | $12.00 | per sq. yd. |
| Wood | 7.00 | per linear ft. |
| Filler | $3.00 | per cu. ft. |
| Springs | 4.50 | per unit |
f. Direct labor requirements:
| King: | |
| Framing Department | 1.2 hrs. at $12 per hr. |
| Cutting Department. | 0.5 hr. at $14 per hr. |
| Upholstery Department | 0.8 hr. at $15 per hr. |
| Prince: | |
| Framing Department | 1.0 hr. at $12 per hr. |
| Cutting Department. | 0.4 hr. at $14 per hr. |
| Upholstery Department | 0.6 hr. at $15 per hr. |
Required:
1. Prepare a sales budget for February.
| Royal Furniture Company Sales Budget For the Month Ending February 28 |
||||
|---|---|---|---|---|
| Product and Area | Unit Sales Volume |
Unit Selling Price |
Total Sales | |
| King: | ||||
| Northern Domestic | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | |
| Southern Domestic | fill in the blank 4 | fill in the blank 5 | fill in the blank 6 | |
| International | fill in the blank 7 | fill in the blank 8 | fill in the blank 9 | |
| Total | fill in the blank 10 | fill in the blank 11 | ||
| Prince: | ||||
| Northern Domestic | fill in the blank 12 | fill in the blank 13 | fill in the blank 14 | |
| Southern Domestic | fill in the blank 15 | fill in the blank 16 | fill in the blank 17 | |
| International | fill in the blank 18 | fill in the blank 19 | fill in the blank 20 | |
| Total | fill in the blank 21 | fill in the blank 22 | ||
| Total revenue from sales | fill in the blank 23 |
2. Prepare a production budget for February.
| Royal Furniture Company Production Budget For the Month Ending February 28 |
||
|---|---|---|
| Units | ||
| King | Prince | |
| Expected units to be sold | fill in the blank 24 | fill in the blank 25 |
| Plus desired inventory, February 28 | fill in the blank 26 | fill in the blank 27 |
| Total units required | fill in the blank 28 | fill in the blank 29 |
| Less estimated inventory, February 1 | fill in the blank 30 | fill in the blank 31 |
| Total units to be produced | fill in the blank 32 | fill in the blank 33 |
3. Prepare a direct materials purchases budget for February.
| Royal Furniture Company Direct Materials Purchases Budget For the Month Ending February 28 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Direct Materials | |||||||||
| Fabric (sq. yds.) |
Wood (linear ft.) |
Filler (cu. ft.) |
Springs (units) |
Total | |||||
| Required units for production: | |||||||||
| King | fill in the blank 34 | fill in the blank 35 | fill in the blank 36 | fill in the blank 37 | |||||
| Prince | fill in the blank 38 | fill in the blank 39 | fill in the blank 40 | fill in the blank 41 | |||||
| Plus desired inventory, February 28 | fill in the blank 42 | fill in the blank 43 | fill in the blank 44 | fill in the blank 45 | |||||
| Total units required | fill in the blank 46 | fill in the blank 47 | fill in the blank 48 | fill in the blank 49 | |||||
| Less estimated inventory, February 1 | fill in the blank 50 | fill in the blank 51 | fill in the blank 52 | fill in the blank 53 | |||||
| Total units to be purchased | fill in the blank 54 | fill in the blank 55 | fill in the blank 56 | fill in the blank 57 | |||||
| Unit price | fill in the blank 58 | fill in the blank 59 | fill in the blank 60 | fill in the blank 61 | |||||
| Total direct materials to be purchased | fill in the blank 62 | fill in the blank 63 | fill in the blank 64 | fill in the blank 65 | fill in the blank 66 |
4. Prepare a direct labor cost budget for February.
| Royal Furniture Company Direct Labor Cost Budget For the Month Ending February 28 |
||||||||
|---|---|---|---|---|---|---|---|---|
| Framing Department |
Cutting Department |
Upholstery Department |
Total | |||||
| Hours required for production: | ||||||||
| King | fill in the blank 67 | fill in the blank 68 | fill in the blank 69 | |||||
| Prince | fill in the blank 70 | fill in the blank 71 | fill in the blank 72 | |||||
| Total hours required | fill in the blank 73 | fill in the blank 74 | fill in the blank 75 | |||||
| Hourly rate | fill in the blank 76 | fill in the blank 77 | fill in the blank 78 | |||||
| Total direct labor cost | fill in the blank 79 | fill in the blank 80 | fill in the blank 81 | fill in the blank 82 |
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