6-33 Comprehensive problem with ABC costing. Pet Luggage 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: Imput Prices Direct materials 4 per pound $ 3 per pound $14 per direct manufacturing labor-hour Plastic Metal Direct manufacturing labor Input Quantities per Unit of Output Cat-allac Dog-eriffic Direct materials Plastic 5 pounds 1 pound 5 hours 20 MH 3 pounds 05 pounds Metal Direct manufacturing labor-hours (DMLH) Machine-hours (MH) 3 hours 13 MH Inventory Information, Direct Materials Plastic 230 pounds 400 pounds $874 Metal Beginning inventory Target ending inventory Cost of beginning inventory 70 pounds 65 pounds $224 Pet Luggage accounts for direct materials using a FIFO cost flow assumption. Sales and Inventory lnformation, 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 580 240 $ 190 S 275 25 45 25 40 $2500 $7,440 ASSIGNMENT MATERIAL 21n Pet Luggage uses a FIFO cost flow assumption for finished goods inventory Pet Luggage uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these activities are $130 per setup-hour, $5 per machine-hour, and $20 per inspection-hour, respectively. Other information follows: Cost Driver Information Cat-allac Dog-eriffic 13 25 Number of units per batch Setup time per batch Inspection time per batch 1.25 hours 0.5 hour 2.00 hours 0.6 hour Nonmanufacturing fixed costs for March equal $32,000, of which half are salaries. Salaries are expected to increase 5 % in April. The only variable nonmanufacturing cost is sales commission, equal to 1% of sales revenue Required 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. Manufacturing overhead cost budgets for each of the three activities 6. Budgeted unit cost of ending finished goods inventory and ending inventories budget 7. Cost of goods sold budget 8. Nonmanufacturing costs budget 9. Budgeted income statement (ignore income taxes)