Question

Dinettes Inc. operates at capacity and makes glass-topped dining tables and wooden chairs that are typically sold as sets of four chairs with one table. However, some customers purchase replacement or extra chairs, and others buy some chairs or a table only, so the sales mix is not exactly 4:1. Dinettes Inc. is planning its annual budget for fiscal year 2013. Information for 2013 follows:
Dinettes Inc. accounts for direct materials using a FIFO cost flow.
Dinettes Inc. uses a FIFO cost flow assumption for finished goods inventory. Chairs are manufactured in batches of 500, and tables are manufactured in batches of 50. It takes three hours to set up for a batch of chairs, and two hours to set up for a batch of tables.
Dinettes Inc. uses activity-based costing and has classified all overhead costs as shown in the table below:
Delivery trucks transport units sold in delivery sizes of 500 chairs or 500 tables.
REQUIRED
Do the following for the year 2013:
1. Prepare the revenue budget.
2. Use the revenue budget to:
a. Find the budgeted allocation rate for marketing costs.
b. Find the budgeted number of deliveries and allocation rate for distribution costs.
3. Prepare the production budget in units.


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  • CreatedJuly 31, 2015
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