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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-allac is smaller. Information for the two products for the month of April is given in the following tables: (Click the icon to view the information for the two products.) Animal Gear accounts for direct materials using a FIFO cost-flow assumption. (Click the icon to view the account information.) 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 $15 per inspection-hour, respectively. Other information follows: (Click the icon to view the other information.) Read the requirements.
Product Information Input Prices Direct materials Plastic $ 5 per pound Metal $ 4 per pound Direct manufacturing labor $10 per direct manufacturing labor hour Input Quantities per Unit of Output Cat-allac Dog-eriffic
Product Information Input Quantities per Unit of Output Direct materials Plastic Metal Direct manufacturing labor-hours (DMLH) Machine-hours (MH) Cat-allac 4 pounds 0.5 pounds 3 hours 11 MH Dog-eriffic 6 pounds 1 pound 5 hours 19 MH
Product Information motar Direct manufacturing labor-hours (DMLH) Machine-hours (MH) Inventory Information, Direct Materials Beginning inventory Target ending inventory Cost of beginning inventory $ v. poun 3 hours 11 MH Plastic 290 pounds 410 pounds 1,102 $ pouna 5 hours 19 MH Metal 70 pounds 65 pounds 217 I
Account Information Sales and Inventory Information, Finished Goods Cat-allac Expected sales in units Selling price $ Target ending inventory in units Beginning inventory in units Beginning inventory in dollars $ Dog-eriffic 530 205 $ 30 10 1,000 $ 225 310 10 19 4,650 I
Account Information Sales and Inventory Information, Finished Goods Cat-allac 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. Dog-eriffic K
Other information Cost Driver Information Cat-allac Dog-errific Number of units per batch 25 9 Setup time per batch 1.50 hours 1.75 hours Inspection time per batch 0.5 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
Other information Cat-allac Dog-errific Number of units per batch 25 9 Setup time per batch 1.50 hours 1.75 hours Inspection time per batch 0.5 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.
Requirements Prepare the following for April: 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. 6. Manufacturing overhead cost budgets for each of the three activities Budgeted unit cost of ending finished goods inventory and ending inventories budget 7. Cost of goods sold budget Q Nonmanufacturing costs budget I
Requirements 3. Direct material usage budget and direct material purchases budget Direct manufacturing labor cost budget 4. 5. 6. Manufacturing overhead cost budgets for each of the three activities 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?
Requirement 3. Prepare the direct material usage budget and direct material purchases budget. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. Direct Material Usage Budget in Quantity and Dollars
Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. Direct Material Usage Budget in Quantity and Dollars For the Month of April Material Total Physical Units Budget Direct materials required for Cat-allac Plastic lbs. Metal lbs.
Physical Units Budget Direct materials required for Cat-allac Dog-errific Total quantity of direct material to be used Plastic Material lbs. lbs. lbs. Metal lbs. lbs. lbs. Total