McKenzie€™s Complete Cook makes and sells mixers and bread makers. In November 2009, McKenzie€™s began the budgetary process. Project sales for 2010 are 60,000 mixers at $50 each and 40,000 bread makers at $120 each. Management gathered the following data to begin the 2010 budget process:
(a) The following purchased components are needed to produce one unit of product:

(b) Expected and desired inventories are as follows:

(c) Projected direct labor requirements for 2010 and rates are as follows:

Required:
(a) Prepare sales budget (in dollars) for 2010.
(b) Prepare a production budget (in units) for 2010.
(c) Prepare a components purchases budget (in units and dollars) for 2010.
(d) Prepare a direct labor budget (by class in hours and dollars) for 2010.
(e) What types of items would be included in production overhead for this company?
(f) The company is thinking of manufacturing its plastic housings rather than buying them from suppliers. What types of costs would such in sourcing create? What types of costs would such in sourcing eliminate? How would you suggest that company management assess such a decision?

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Component Plastic housing Motor Beaters Mixer l #531 B @ $8 l #KMU @ SI 5 2 #BU6 @ $2.20 Bread maker 1 #648C @ $24 1 #KBU @ SI 7.80 4 #BU6 @ $2.20 MixerS Bread makers #531 B plastic housings #648C plastic housings #KMU motors #KBU motors #BU 6 beaters Expected EI Dec. 31,2009 3,000 6,000 500 620 1,100 1,380 5,000 Desired El Dec. 31, 2010 2,000 2,800 700 800 2,400 1,200 4,000 Product Mixer Bread maker Class A lab Class B labor ($10 per hour) S12 per hour) 1.3 hours per ut 1.5 hours per unit 1.6 hours per unit 2.2 hours per unit