Problem 21-2A

Budgeting Systems for Management Accounting Warren / Reeve / Duchac Problem 21-2A solution

Sales, production, direct materials purchases, and direct labor cost budgets

The budget director of Regal 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 August 2010 is summarized as follows:

a. Estimated sales of King and Prince chairs for August by sales territory:

b. Estimated inventories at August 1:

c. Desired inventories at August 31:

d. Direct materials used in production:

e. Anticipated purchase price for direct materials:

f. Direct labor requirements:

1. Prepare a sales budget for August.

2. Prepare a production budget for August. Enter all amounts as positive numbers.

3. Prepare a direct materials purchases budget for August.

4. Prepare a direct labor cost budget for August.