$6-48$ Comprehensive budgeting problem; activity$-$based costing, operating and financial budgets. Tyva makes a very popular undyed cloth sandal in one style, but in Regular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth$-$covered wooden soles. Tyva is preparing its budget for June $2021$ and has estimated sales based on past experience. Other information for the month of June follows:

Input Prices

Direct materials

$$Cloth $$5\mathrm{.}25$ per yard

$$Wood $$7\mathrm{.}50$ per board foot

Direct manufacturing labor $$15$ per direct manufacturing labor$-$hour

Input Quantities per Unit of Output $($per Pair of Sandals$)$

Regular Deluxe

Direct materials

$$Cloth $1\mathrm{.}3$ yards $1\mathrm{.}5$ yards

$$Wood $02$ b$.$f$.$

Direct manufacturing labor$-$hours $($DMLH$)5$ hours $7$ hours

Setup$-$hours per batch $2$ hours $3$ hours

Inventory Information, Direct Materials

Cloth Wood

Beginning inventory $610$ yards $800$ b$.$f$.$

Target ending inventory $386$ yards $295$ b$.$f$.$

Cost of beginning inventory $$3,219$ $$6,060$

Tyva accounts for direct materials using a FIFO cost$-$flow assumption.

Sales and Inventory Information, Finished Goods

Regular Deluxe

Expected sales in units $($pairs of sandals$)2,0003,000$

Selling price $$120$ $$195$

Target ending inventory in units $400600$

Beginning inventory in units $250650$

Beginning inventory in dollars $$23,250$ $$92,625$

Tyva uses a FIFO cost$-$flow assumption for finished$-$goods inventory.

All the sandals are made in batches of $50$ pairs of sandals. Tyva incurs manufacturing overhead costs, marketing and general administration, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Tyva ships $40$ pairs of sandals per shipment. Tyva uses activity$-$based costing and has classified all overhead costs for the month of June as shown in the following chart:

Cost Type Denominator Activity Rate

Manufacturing

$$Setup Setup$-$hours $ $18$ per setup$-$hour

$$Processing Direct manufacturing labor$-$hours $($DMLH$)$ $$1\mathrm{.}80$ per DMLH

$$Inspection Number of pairs of sandals $$1\mathrm{.}35$ per pair

Operating $($nonmanufacturing$)$

$$Marketing and general administration Sales revenue $8\%$

$$Shipping Number of shipments $ $15$ per shipment

$1.$ Prepare each of the following for June:

a$.$ Revenues budget

b$.$ Production budget in units

c$.$ Direct material usage budget and direct material purchases budget in both units and dollars; round to dollars

d$.$ Direct manufacturing labor cost budget

e$.$ Manufacturing overhead cost budgets for setup, processing, and inspection activities

f$.$ Budgeted unit cost of ending finished$-$goods inventory and ending f$.$ inventories budget

g$.$ Cost of goods sold budget

h$.$ Marketing and general administration and shipping costs budget

$2.$ Tyva$$s balance sheet for May $31$ follows.

Tyva Balance Sheet as of May $31$

Assets

Cash $$9,435$

Accounts receivable $$324,000$

$$Less: Allowance for bad debts $16,200307,800$

Inventories

Direct materials $9,279$

Finished goods $115,875$

Fixed assets $$870,000$

$$Less: Accumulated depreciation $136,335733,665$

Total assets $$1,176,054$

Liabilities and Equity

Accounts payable $$15,600$

Taxes payable $10,800$

Interest payable $750$

Long$-$term debt $150,000$

Common stock $300,000$

Retained earnings $698,904$

Total liabilities and equity $$1,176,054$

Use the balance sheet and the following information to prepare a cash budget for Tyva for June. Round to dollars.

All sales are on account; $60\%$ are collected in the month of the sale, $38\%$ are collected the following month, and $2\%$ are never collected and written off as bad debts.

All purchases of materials are on account. Tyva pays for $80\%$ of purchases in the month of purchase and $20\%$ in the following month.

All other costs are paid in the month incurred, including the declaration and payment of a $$15,000$ cash dividend in June.

Tyva is making monthly interest payments of $0\mathrm{.}5\%(6\%$ per year$)$ on a $$150,000$ long$-$term loan.

Tyva plans to pay the $$10,800$ of taxes owed as of May $31$ in the month of June. Income tax expense for June is $$25,107,$ which will be paid in July.

$30\%$ of processing, setup, and inspection costs and $10\%$ of marketing and general administration and shipping costs are depreciation.

$3.$ Prepare a budgeted income statement for June and a budgeted balance sheet for Tyva as of June $30,2021.$

Only Need the Income Statement and Balance Sheet for Question $3.$