John Reedus & Company: John Reedus & Company is in the process of preparing budg

Question

John Reedus & Company: John Reedus & Company is in the process of preparing budgets for the upcoming year, 2018. The company produces several styles of outdoor chairs and tables. You work in the accounting department of the company and your supervisor has assigned to you the task of preparing the sales, production, direct materials, and direct labor budgets for the Standard line of outdoor chairs. The following data has been provided Sales budget Projected sales units,chairs Sales price per chair 600,000 $ 77.50 Production budget Beginning chairs, finished goods (units) Desired ending inventory, finished chairs (units) 45,000 30,000 Dirct material per unit (yards) direct materials, yards 60,000 75,000 Cost per yards $5 Direct labor budget REQUIRED: Include adequate computations Prepare (1) a sales budget, (2) a production budget, (3) a direct materials budget, and (4) a direct labor budget for the Standard outdoor chairs produc ed by John NOTE: Be sure your budgets are in GOOD FORM. Use only the space bar for spacing and do not use the tab key. Draw lines and put dollar signs (5) where Direct labor time per chair Direct labor rate per hour 1 hr $20 TT TT Paragraph , Arial '·-·-·T. 3(12pt) Click Save and Submit to save and submit. Click Save All Answers to save all answers

Explanation / Answer

Unit Amount Sales 600000 no. $        46,500,000 (600000*77.5) Beginning finished goods inventory 45000 no. Ending finished goods inventory 30000 no. Production in the year=(600000+(30000-45000) 585000 no. Beginning direct material inventory 60000 yards $              300,000 ($5*60000) Ending direct material inventory 75000 yards $              375,000 ($5*75000) Direct material needed for production(3*585000) 1755000 yards $          8,775,000 ($5*1755000)) Direct Material purchase(1755000+(75000-60000) 1770000 yards $          8,850,000 (5*1770000) Direct labor (585000*1) 585000 hour $        11,700,000 ($20*585000)

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