Comprehensive problem; ABC manufacturing two products. Dinettes Inc. operates at capacity and 2es glass topped dining tables and wooden chairs, which are then 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 2009. Information for 2009 follows:

Dinettes Inc. accounts for direct materials using a FIFD cost flow.

Dinette Inc. uses a FlEO cost flow assumption for finished goods inventory. Chairs are manufactured in batches of SOD, 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. Dinette 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.

Do the following for the year 2009:

1. Prepare the revenues 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.

4. Use the production budget to:

a. Find the budgeted number of setups, setup hours, and the allocation rate for setup costs.

b. Find the budgeted total machine hours and the allocation rate for processing costs.

5. Prepare the direct material usage budget and the direct material purchases budgets.

6. Use the direct material usage budget to find the budgeted allocation rate for materials handling costs.

7. Prepare the direct manufacturing labor cost budget

8. Prepare the manufacturing overhead cost budget for materials handling, setup, and processing.

9. Prepare the budgeted unit cost of ending finished goods inventory and ending inventories budget

10. Prepare cost of goods sold budget.

11. Prepare the non-manufacturing overhead costs budget for marketing and distribution.

12. Prepare a budgeted income statement (ignore income taxes).

13. Compare the budgeted unit cost of a chair to its budgeted selling price. Why might Dinette Inc. continue to sell the chairs for only $80?

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Input prices Direct materials $ 1.60 per board foot S12 per sheet $15 per direct manufacturing labor-hour Wood Glass Direct manufacturing labor Input quantities per unit of output Chairs Tables Direct materials 7 board feet Wood 5 hoard feet Glass 2 sheets Direct manufacturing labor Machine-hours (MH} 4 hours 8 hours 3 MH 5 MH Inventory information, direct materials Glass 8,750 sheets Wood 109,200 board feet Beginning inventory Target ending inventory Cost of beginning inventory 117,500 board feet $170,352 9,000 sheets S109,375