Revenue and production budgets. (CPA, adapted) The Scarborough Corporation manu¬

factures and sells two products, Thingone and Thingtwo. In July 2007, Scarborough’s Budget Department gathered the following data in order to prepare budgets for 2008:

2008 Projected Sales Product Units Price Thingone 60,000 $198 Thingtwo 40,000 $300 2008 Inventories in Units Expected Target Product January 1, 2008 December 31, 2008 Thingone 22,000 27,000 Thingtwo 10,000 11,000 To produce one unit ofThingone and Thingtwo, the following direct materials are used:

Direct Material Amount Used per Unit Unit Thingone Thingtwo A Kilograms 4 5 B Kilograms 2 3 C Each 0 1 Projected data for 2008 with respect to direct materials are as follows:

Expected Target Anticipated Inventories Inventories Direct Purchase January 1, December 31, Material Price 2008 2008 A $14 32,000 kilograms 36,000 kilograms B $ 7 29,000 kilograms 32,000 kilograms C $ 5 6,000 units 7,000 units Projected direct manufacturing labour requirements and rates for 2008 are as follows:

Product Hours per Unit Rate per Hour Thingone 2 $15 Thingtwo 3 $19 Manufacturing overhead is allocated at the rate of $24 per direct manufacturing labour-hour.

Required Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2008:

1. Revenue budget (in dollars)

2. Production budget (in units)

3. Direct materials purchases budget (in quantities)

4. Direct materials purchases budget (in dollars)

5. Direct manufacturing labour budget (in dollars)

CHAPTER 6 6. Budgeted finished goods inventory at December 31, 2008 (in dollars)