Question

ii) Treehouse Furniture manufactures a variety of desks, chairs, tables and shelf units which are sold to public school systems throughout Queensland. The accountant of the company's School Desk Division is currently preparing a budget for the first quarter of 20x9. The following sales forecast has been made by the division's sales manager. January February March 5,000 desk and chair sets 6,000 desk and chair sets 7,500 desk and chair sets Each desk and chair set requires 10 metres of pine planks and 1.5 hours of direct labour. Each set sells for $50. Pine planks cost $0.50 per metre and the division ends each month with enough wood to cover 10 per cent of the next month's production requirements. The division incurs a cost of $20.00 per hour for direct labour wages and fringe benefits. The division ends each month with enough finished goods inventory to cover 20 per cent of the next month's sales. Required: Provide the following budget schedules. a) Sales budget (in sets) for January, February, and March. (2 marks)

Answer 1

Sales Budget
	Jan	Feb	March
Quantity Sold (a)	5000	6000	7500
Selling price / Unit (b)	$50.00	$50.00	$50.00
Estimated Sales Value (axb)	$250,000.00	$300,000.00	$375,000.00
Production Budget
	Jan	Feb	March
Quantity Sold (a)	5,000	6,000	7,500
Add: Desired Ending Inventory (20% of Next Month Sales)	1,200	1,500
Total Needs	6,200	7,500
Less: Beginning Inventory	1,000	1,200
Estimated Production	5,200	6,300
* Beg Inventoryy for Jan : 5000*20%=1000