Pet Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made...

 

  
  

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Pet 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.) Pet Gear accounts for direct materials using a FIFO cost-flow assumption. (Click the icon to view the account information.) Requirement 1. Prepare the revenues budget. Revenues Budget For the Month of April Units Selling price 530 $ 265 Cat-allac Dog-eriffic Total Total revenues 108,650 82,150 190,800 205 $ 310 $ Enter any number in the edit fields and then click Check Answer. Pet 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. Input Prices Direct materials Plastic Metal Direct manufacturing labor Input Quantities per Unit of Output Direct materials 5 per pound 4 per pound $10 per direct manufacturing labor hour Beginning inventory Target ending inventory Cost of beginning inventory $ $ Plastic Metal Direct manufacturing labor-hours (DMLH) Machine-hours (MH) Inventory Information, Direct Materials GA Cat-allac 4 pounds 0.5 pounds 3 hours 11 MH Plastic 270 pounds 410 pounds 1,080 $ Dog-eriffic 6 pounds 1 pound 5 hours 18 MH Metal 70 pounds 60 pounds 210 Sales and Inventory Information, Finished Goods Cat-allac Dog-eriffic $ Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars $ Pet Gear uses a FIFO cost-flow assumption for finished-goods inventory. 530 205 $ 30 10 1,000 $ 265 310 10 25 4,650 Cost Driver Information Cat-allac 25 Number of units per batch Setup time per batch Inspection time per batch 1.50 hours 0.5 hours Dog-errific 10 2.00 hours 0.8 hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $38,000, 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: 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. 7. 8. 9. Manufacturing overhead cost budgets for each of the three activities Budgeted unit cost of ending finished goods inventory and ending inventories budget Cost of goods sold budget Nonmanufacturing costs budget Budgeted income statement (ignore income taxes) 10. How does preparing the budget help Pet Gear's management team better manage the company? Pet 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.) Pet Gear accounts for direct materials using a FIFO cost-flow assumption. (Click the icon to view the account information.) Requirement 1. Prepare the revenues budget. Revenues Budget For the Month of April Units Selling price 530 $ 265 Cat-allac Dog-eriffic Total Total revenues 108,650 82,150 190,800 205 $ 310 $ Enter any number in the edit fields and then click Check Answer. Pet 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. Input Prices Direct materials Plastic Metal Direct manufacturing labor Input Quantities per Unit of Output Direct materials 5 per pound 4 per pound $10 per direct manufacturing labor hour Beginning inventory Target ending inventory Cost of beginning inventory $ $ Plastic Metal Direct manufacturing labor-hours (DMLH) Machine-hours (MH) Inventory Information, Direct Materials GA Cat-allac 4 pounds 0.5 pounds 3 hours 11 MH Plastic 270 pounds 410 pounds 1,080 $ Dog-eriffic 6 pounds 1 pound 5 hours 18 MH Metal 70 pounds 60 pounds 210 Sales and Inventory Information, Finished Goods Cat-allac Dog-eriffic $ Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars $ Pet Gear uses a FIFO cost-flow assumption for finished-goods inventory. 530 205 $ 30 10 1,000 $ 265 310 10 25 4,650 Cost Driver Information Cat-allac 25 Number of units per batch Setup time per batch Inspection time per batch 1.50 hours 0.5 hours Dog-errific 10 2.00 hours 0.8 hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $38,000, 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: 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. 7. 8. 9. Manufacturing overhead cost budgets for each of the three activities Budgeted unit cost of ending finished goods inventory and ending inventories budget Cost of goods sold budget Nonmanufacturing costs budget Budgeted income statement (ignore income taxes) 10. How does preparing the budget help Pet Gear's management team better manage the company?

Answer rating: 100% (QA)

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