The budget director of the Freeman Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month.
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The budget director of the Freeman Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month.
Selected information concerning sales and production data for February 20X9 is presented below.
Estimated Sales of King and Queens Chairs for February by Sales Territory
Midwest Region
King
680 units at $820 per unit
Queens
850 units at $540 per unit
Southern Region
King
390 units at $820 per unit
Queens
480 units at 4540 per unit
International Region
King
420 units at $870 per unit
Queens
330 units at $600 per unit
Estimated Inventories at February 1, 20X9
Direct Materials
Fabric
470 square yards
Wood
620 linear ft
Filler
300 cubic ft
Springs
710 units
Finished Products
King
105 units
Queens
35 units
Desired Inventories at February 28, 20X9
Direct Materials
Fabric
430 square yards
Wood
680 linear ft
Filler
350 cubic ft
Springs
660 units
Finished Products
King
95 units
Queens
40 units
Direct Materials Used in Production
In Manufacture of King
Fabric
6.5 square yards per unit of product
Wood
42 linear ft per unit of product
Filler
4.6 cubic ft per unit of product
Springs
18 units per unit of product
In Manufacture of Queens
Fabric
4.5 square yards per unit of product
Wood
30 linear ft per unit of product
Filler
3.8 cubic ft per unit of product
Springs
14 units per unit of product
Anticipated Purchase Price for Direct Materials for Both Products
Fabric
$16.00 per square year
Wood
$9.50 per linear ft
Filler
$4.50 per cubic
Springs
Direct Labor Requirements
King
Framing Department
1.2 hours at $16 per hour
Cutting Department
0.5 hours at $19 per hour
Upholstery Department
0.8 hours at $20 per hour
Queens
Framing Department
1.0 hours at $16 per hour
Cutting Department
0.4 hours at $19 per hour
Upholstery Department
0.6 hours at $20 per hour
Important!
It is expected that the assignment will be completed using an Excel spreadsheet using formulas.
Prepare a sales budget for February 20X9.
Prepare a production budget for February 20X9.
Prepare a direct materials purchases budget for February 20X9.
Prepare a direct labor budget for February 20X9.
The production supervisor wants to purchase new production equipment for April 20X9. The goal is to replace the labor-intensive production system. Please write a memo to the executive team explaining why new production equipment could affect the production and purchases budgets.
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