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School Days Furniture Ltd manufactures a variety of desks, chairs, tables, and bookshelves that are sold to public schools in Western Australia

Accounting

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School Days Furniture Ltd manufactures a variety of desks, chairs, tables, and bookshelves that are sold to public schools in Western Australia. The financial accountant of the desk division is currently preparing the budget for the third quarter of this year. The following sales have been forecast for the third quarter.

Each desk requires 3 meters of wooden planks and 1.5 hours of direct labour. Each desk sells for $ 200. Wooden planks costs $18 per metre and at the end of each month there is enough wood remaining to cover 10 per cent of the next month’s production requirements. The division incurs a cost of $25 per hour for direct labour, including on-costs. The division ends each month with enough finished goods to satisfy 20 per cent of the following month’s sales.

Required:

1. In an Excel spreadsheet construct and complete the following budget schedules.

1. Sales budget

2. Production budget (units)

3. Raw materials purchases

4. Direct labour budget