Problem 21-2B

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

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

The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July 2010 is summarized as follows:

a. Estimated sales 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 purchases budget for July.

4. Prepare a direct labor cost budget for July.

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.

Exercise 21-12

Budgeting Systems for Management Accounting Warren / Reeve / Duchac Exercise 21-12 solution

Direct labor cost budget
Hammer Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for October for the two rackets is as follows:

Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

The direct labor rate for each department is as follows:

Prepare the direct labor cost budget for October 2010