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 Wood Direct manufacturing labor $5.25 per yard $7.50 per board foot $15 per direct manufacturing labor-hour Deluxe Input Quantities per Unit of Output (per Pair of Sandals) Regular Direct materials Cloth 1.3 yards Wood 0 Direct manufacturing labor-hours (DMLH) 5 hours Setup-hours per batch 2 hours 1.5 yards 2b.f. 7 hours 3 hours Sales and Inventory Information, Finished Goods Expected sales in units (pairs of sandals) Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars Regular 2,000 S 120 400 250 $23,250 Deluxe 3.000 $ 195 600 650 $92,625 Tyva accounts for direct materials using a FIFO cost-flow assumption Tyva accounts for direct materials using a FIFO cost-flow assumption. Ratu Cost Type Denominator Activity Manufacturing Setup Setup-hours Processing Direct menuturing labor hours OMLH) Inspection Number of his of Sandals Operating ng manufacturing) Marketing and general administration Sales revenue Shipping Number of sins $ 18 persetup-hour $130 per OMLA $135 per $ 15 personen 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 00 pars of Sandals per shipment. Tyvauses activity based costing and has casibed all overhead costs for the month of June as shown in the following chart 11 person Spor DMI Cost Type Denemel Activity Manufacturing Setup Setup-hour Processing Direct manfacturing lobor-hours DMLN Inspection Number of pain of sandals Operating normaliting! Marketing and general administration Salerno Shipping Number shant Set 15 per shit 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 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. $ 9,435 307,800 Tyva Balance Sheet as of May 31 Assets Cash Accounts receivable $324,000 Less: Allowance for bad debts 16,200 Inventories Direct materials Finished goods Fixed assets $870,000 Less: Accumulated depreciation 136.335 Total assets 9,279 115,875 733,665 $1,176,054 $ 9,435 307,800 Tyva Balance Sheet as of May 31 Assets Cash Accounts receivable $324,000 Less: Allowance for bad debts 16,200 Inventories Direct materials Finished goods Fixed assets S870,000 Less: Accumulated depreciation 136,335 Total assets 9,279 115,875 733,665 $1,176,054 Liabilities and Equity Accounts payable Taxes payable Interest payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 15,600 10.800 750 150,000 300,000 698 904 $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 0.5% (6% per year) on a $150,000 long-term loan. 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 0.5% (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