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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Input prices Direct materials Wood Glass 1.60 per board foot S12 per sheet $15 per direct manufacturing labour-hour Direct manufacturing labour Input quantities per unit of output Chairs Tables Direct materials 5 board feet 7 board feet 2 sheets 8 hours 5 MIH Wood Glass Direct manufacturing labour Machine hours (MH) 4 hours 3 MH Inventory information, direct materials Wood Glass eginning inventory Target ending inventory Cost of beginning inventory 109,200 board feet 117,500 board feet S170,352 8,750 sheets 9,000 sheets $109,375 Sales and iventory information, finisbed goods Chairs Tables Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars 172,000 $80 8,500 8,000 S760,000 45,000 S900 2,250 2,100 $477,000 Sales and inventory information, finished goods Chairs Tables Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars 172,000 $80 8,500 8,000 S760,000 45,000 S900 2,250 2,100 $477,000 Budgeted Budgeted Cost driver/ Allocation base Cost type fixed variable Manufacturing: Materials handling$342,840 600,000 Number of board feet used Setup Processing 97,000 300,740 Setup hours 789,250 5,900,000 Machine hours Non-manufacturing Marketing Distribution 2,011,200 4,500,000 Sales revenue 54,000 80,000 Number of deliveries