Comprehensive budgeting problem; activity-based costing, operating and financial 3, Budgeted net income $998 budgets. Yummi-Lik makes really big lollipops in two sizes, large and giant. Yummi-Lik sells these lollipops to convenience stores, fairs, schools for fundraisers, and in bulk on the Internet.

Summer is approaching and Yummi-Lik is preparing its budget for the month of June. The lollipops are handmade, mostly out of sugar, and attached to wooden sticks. Expected sales are based on past experience. This company uses pounds of material as its standard measure.

Other information for the month of June follows: 

All the lollipops are made in batches of 10. Yummi-Lik incurs manufacturing overhead costs, and marketing and general administration costs, but customers pay for shipping. Other than manufacturing labour costs, monthly processing costs are very low. Yummy-Lik uses activity-based costing and has classified all overhead costs for the month of June as shown in the following chart:

REQUIRED 1. Prepare each of the following for June:

a. Revenue budget

b. Production budget in units

c. Direct material usage budget and direct material purchases budget

d. Direct manufacturing labour cost budget

e. Manufacturing overhead cost budgets for processing and setup activities

f. Budgeted unit cost of ending finished goods inventory and ending inventories budget g. Cost of goods sold budget h. Marketing and general administration costs budget 2. Yummi-Lik's balance sheet for May 31 follows. Use it and the following information to prepare a cash budget for Yummi-Lik for June. 80% of sales are on account, of which half are collected in the month of the sale, 49% are collected the following month, and 1% are never collected and written off as bad debts. All purchases of materials are on account. Yummi-Lik pays for 70% of purchases in the month of purchase and 30% in the following month. All other costs are paid in the month incurred. Yummi-Lik is making monthly interest payments of 1% (12% per year) on a $20,000 long-term loan. Yummi-Lik plans to pay the $500 of taxes owed as of May 31 in the month of June. Income tax expense for June is zero. 40% of processing and setup costs, and 30% of marketing and general administration costs are amortization.LO1

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Input prices Direct materials Sugar Sticks Direct manufacturing labour Input quantities per unit of output $0.50 per pound (lb) $0.30 each $8 per direct manufacturing labour-hour Large Giant Direct materials Sugar 0.25 lb 0.50 lb Sticks 1 1 Direct manufacturing labour-hours (DMLH) 0.20 hours 0.25 hours Setup hours per batch 0.08 hours 0.09 hours Inventory information, direct materials Beginning inventory Target ending inventory Cost of beginning inventory Sugar Sticks 125 lb 350 240 lb 480 $64 $105 Yummi-Lik accounts for direct materials using a FIFO cost flow assumption. Sales and inventory information, finished goods