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Sales, production, direct materials, direct labor budgets

The budget director of Royal Furniture Company requests estimates of sales, production and other operating data from various administrative units every month. Selected information concerning sales and production for July 2006 is summarized as follows: (See attachment)
a) Estimated sales of King and Prince chairs for July by sales territory:
b) Estimated inventories at July 1:
c) Desired inventories at July 31:
d) Direct materials used in production:
e) Anticipated purchase price for direct materials:
f) Direct labor requirements:

1) Prepare a sales budget for July.
2) Prepare a production budget for July.
3) Prepare a direct materials budget for July.
4) Prepare a direct labor cost budget for July.


Solution Preview

see attached file

Sales Budget:

Total Northern Domestic Southern Domestic International
Projected Sales (units) 10,400 5,700 3,600 1,100
Unit Price $600 $620 $700
Total projected Sales ($) $6,422,000 $3,420,000 $2,232,000 $770,000

Total Northern Domestic Southern Domestic International
Projected Sales (units) 12,200 6,900 4,000 1,300
Unit Price $450 $460 $500
Total projected Sales ($) $5,595,000 $3,105,000 $1,840,000 $650,000

Total Projected Sales
(King and Prince) $12,017,000

2) Production Budget:

King Prince
Projected Sales (Units) 10,400 12,200
Projected Ending inventory 700 300
Total projected need 11,100 12,500
Less Beginning inventory 840 280
Projected Production 10,260 12,220

3) Direct material purchase budget:

1) Fabric (in sq yds)
Total King Prince
Projected Production ...

Solution Summary

Prepare a sales budget, a production budget, a direct materials budget and a direct labor cost budget.