Sales, Production, Direct Materials Purchases, and Direct Labor Cost BudgetsThe 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 2016 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 unitPrince 750 units at $550 per unitSouthern Domestic:King 340 units at $780 per unitPrince 440 units at $550 per unitInternational:King 360 units at $850 per unitPrince 290 units at $600 per unitb. Estimated inventories at February 1:Direct materials:Fabric 420 sq. yds.Wood 580 linear ft.Filler 250 cu. ft.Springs 660 unitsFinished products:King 90 unitsPrince 25 unitsc. Desired inventories at February 28:Direct materials:Fabric 390 sq. yds.Wood 650 linear ft.Filler 300 cu. ft.Springs 540 unitsFinished products:King 80 unitsPrince 35 unitsd. Direct materials used in production:In manufacture of King:Fabric 6.0 sq. yds. per unit of productWood 38 linear ft. per unit of productFiller 4.2 cu. ft. per unit of productSprings 16 units per unit of productIn manufacture of Prince:Fabric 4.0 sq. yds. per unit of productWood 26 linear ft. per unit of productFiller 3.4 cu. ft. per unit of productSprings 12 units per unit of producte. 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 unitf. 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 CompanySales BudgetFor the Month Ending February 28, 2016Product and Area Unit SalesVolume Unit SellingPrice Total SalesKing: Northern Domestic Southern Domestic International Total Prince: Northern Domestic Southern Domestic International Total Total revenue from sales 2. Prepare a production budget for February.Royal Furniture CompanyProduction BudgetFor the Month Ending February 28, 2016UnitsKing PrinceExpected units to be sold Plus desired inventory, February 28, 2016 Total Less estimated inventory, February 1, 2016 Total units to be produced 3. Prepare a direct materials purchases budget for February.Royal Furniture CompanyDirect Materials Purchases BudgetFor the Month Ending February 28, 2016Direct MaterialsFabric(sq. yds.) Wood(linear ft.) Filler(cu. ft.) Springs(units) TotalRequired units for production: King Prince Plus desired inventory, February 28, 2016 Total Less estimated inventory, February 1, 2016 Total units to be purchased Unit price Total direct materials to be purchased 4. Prepare a direct labor cost budget for February.Royal Furniture CompanyDirect Labor Cost BudgetFor the Month Ending February 28, 2016FramingDepartment CuttingDepartment UpholsteryDepartment TotalHours required for production: King Prince Total Hourly rate Total direct labor cost
