INPUT SECTION–BUDGET ASSUMPTIONS
Quarter
FirstSecondThirdFourth
Revenue Assumptions:
Forecasted housing starts (local area)6,00024,0007,0002,000
Average number of sinks per house3.02.93.03.1
Market share35%35%35%35%
Average selling price per unit$85.00$85.00$85.00$85.00
Production Cost Assumptions:
Variable Production Costs:
Direct material-Pounds per unit40404040
Direct material-Cost per pound$0.50$0.50$0.50$0.50
Direct labor-Hours per unit3333
Direct labor-Cost per hour$12.00$12.00$12.00$12.00
Desired ending sink inventory as % of next quarter’s sales10%10%10%10%
Desired ending DM inventory as % of next quarter’s DM requirement10%10%10%10%
Variable Production Costs Per Direct Labor Hour:
Indirect labor$0.3000$0.3000$0.3000$0.3000
Supplies$0.2667$0.2667$0.2667$0.2667
Other$0.1000$0.1000$0.1000$0.1000
Fixed Production Cost: