question archive Animal Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic
Animal Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic
Subject:AccountingPrice: Bought3
Animal Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allae is smaller. Information for the two products for the month of April is given in the following tables: Input Prices Direct materials Plastic Metal Direct manufacturing labor $5 per pound S4 per pound $10 per direct manufacturing labor-hour Input Quantities per Unit of Output Cat-allac Dog-eriffic Direct materials Plastic Metal Direct manufacturing labor-hours Machine-hours (MH) Inventory Information Direct Materials 4 pounds 0.5 pounds 3 hours 11 MH 8 pounds 1 pound 5 hours 19 MH Beginning inventory Target ending inventory Cost of beginning inventory Plastic 280 pounds 410 pounds $1,102 Metal 70 pounds 85 pounds 5217 Animal Gear accounts for direct materials using a FIFO cost-flow assumption. Sales and Inventory Information, Finished Goods Cat-allac Dog-eriffic Expected sales in units 530 225 Selling price $ 205 $ 310 Target ending inventory in units 30 10 Beginning inventory in units 10 19 Beginning inventory in dollars $1,000 $4,650 Animal Gear uses a FIFO cost-flow assumption for finished-goods inventory. Animal Gear uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection, Activity rates for these activities are $105 per setup-hour, $10 per machine-hour, and S15 per inspection-hour. respectively. Other information follows: Dog-eriffic Cost-Driver Information Cat-allac Number of units per batch 25 Setup time per batch 1.50 hours Inspection time per batch 0.5 hour 1.75 hours 0.7 hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $32,000, half of which are salaries. Salaries are expected to increase 5% in April. Other nonmanufacturing fixed costs will remain the same. The only variable nonmanufacturing cost is sales commission, equal to 1% of sales revenue. Prepare the following for April: Required: 1. Revenues budget 2. Production budget in units 3. Direct material usage budget and direct material purchases budget 4. Direct manufacturing labor cost budget 5. Manufacturing overhead cost budgets for each of the three activities 6. Budgeted unit cost of ending finished-goods inventory and ending inventories budget 7 Cost of goods sold budget 8. Nonmanufacturing costs budget 9. Budgeted income statement (ignore income taxes) 10. How does preparing the budget help Animal Gear's management team better manage the company?
