• An exponential growth function with the year being the independent variable and the sales volume being the dependent variable will be an appropriate sales projection method .
2006 DIRECT MATERIAL AND INVENTORY BUDGET INFORMATION
The production department worked in conjunction with both the sales and purchasing departments in developing desired projected inventory levels for December 31 , 2006 . Information regarding beginning and desired ending inventories for 2006 are as follows :
Hint : Remember that each gallon of paint requires two pounds of pigment .
2006 DIRECT LABOR BUDGET INFORMATION
During 2005 , a new contract was signed with the union . As part of that agreement , no worker can work in more than one department , and no single worker can work over 2,000 hours during the year . This means that for every 2,000 hours of labor that is required for production in each department , one hourly employee is needed . For example , if a department needs 10,150 labor hours during the year , six employees will be needed ( 10,150 total hours / 2,000 per employee = 5.075 which needs to be rounded to 6 employees ).
The standard direct labor rate will increase $ 0.25 per hour over the 2005 rate .
Additional information regarding employee benefits is included in the section on manufacturing overhead .
2006 OVERHEAD BUDGET INFORMATION
The following information is available regarding the actual overhead costs incurred for 2005 :