A Additional Blanket Information - X The company sews the blankets from fabric and sews on a logo patch purchased from the licensed logo store site. The teams are as follows: Broncos, with red blankets and the Broncos logo Rams, with black blankets and the Rams logo Also, the black blankets are slightly larger than the red blankets. Print Done Budgeted Direct-Cost Inputs - X The budgeted direct-cost inputs for each product in 2017 are as follows: Broncos Blanket Rams Blanket Red wool fabric 10 yards O yards Black wool fabric 11 Broncos logo patches Rams logo patches Direct manufacturing labor 9 hours 10 hours Print Done A Manufacturing Overhead Information - X The budgeted variable manufacturing overhead rate for March 2017 is $22 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2017 is $41,000. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. Print Done Direct Materials Unit data pertaining to the direct materials for March 2017 are as follows: Actual Beginning Direct Materials Inventory (3/1/2017) Broncos Blanket Rams Blanket Red wool fabric 65 yards O yards Black wool fabric Broncos logo patches 75 Rams logo patches Target Ending Direct Materials Inventory (3/31/2017) Broncos Blanket Rams Blanket Red wool fabric 55 yards O yards Black wool fabric Broncos logo patches Rams logo patches A Finished Goods Inventory - X Data relating to finished goods inventory for March 2017 are as follows: Broncos Blanket Rams Blanket 24 Beginning inventory in units Beginning inventory in dollars (cost) Target ending inventory in units 29 4,640 $ $4,560 34 39 Print Done A Sales and Other Information - X Budgeted sales for March 2017 are 190 units of the Broncos blankets and 220 units of the Rams blankets. The budgeted selling prices per unit in March 2017 are $859 for the Broncos blankets and $953 for the Rams blankets. Assume the following in your answer: Work-in-process inventories are negligible and ignored. Direct materials inventory and finished goods inventory are costed using the FIFO method. Unit costs of direct materials purchased and finished goods are constant in March 2017. Print Done i Requirements 1. C. Prepare the following budgets for March 2017: a. Revenues budget b. Production budget in units Direct material usage budget and direct material purchases budget Direct manufacturing labor costs budget e. Manufacturing overhead costs budget f. Ending inventories budget (direct materials and finished goods) g. Cost of goods sold budget Suppose Lynsay Specialties decides to incorporate continuous improvement into its budgeting process. Describe two areas where it could incorporate continuous improvement into the budget schedules in requirement 1. 2. Requirement 1. Prepare the following budgets. a. Prepare the revenues budget. Revenues Budget For the Month of March Units Selling Price 190 $ 220 953 Total revenues Broncos Blankets 859 163210 Rams Blankets 209660 372870 Total b. Prepare the production budget in units. Production Budget For the Month of March Broncos Rams 220 Budgeted units sales 190 34 39 Add target ending finished goods inventory Total required units C 259 224| 24 29 Deduct beginning finished goods inventory 200 230 Units of finished goods to be produced c. Prepare the direct material usage budget and direct material purchases budget. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. (For amounts with a zer Direct Material Usage Budget in Quantity and Dollars For the Month of March Material Broncos logo patches Rams logo patches Red wool Black wool Total Physical Units Budget Direct materials required for Broncos yds. yds. yds. yds. Rams Total quantity of direct material to be used yds. yds. Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) Broncos Rams To be purchased this period Broncos Rams Direct materials to be used this period Now prepare March's direct material purchases budget. Direct Materials Purchases Budget For the Month of March Materials Broncos logo patches Rams logo patches Red wool Black wool Total Physical Units Budget To be used in production lyds. 55 yds. Add target ending inventory Total requirement yds. Deduct beginning inventory 65 yds. vds. 3 Purchases to be made Cost Budget Purchases d. Prepare the direct manufacturing labor costs budget. (Abbreviation used: DMLH = Direct manufacturing labor hours) Direct Manufacturing Labor Costs Budget For the Month of March Output units DMLH Total Hourly produced per unit DMLH wage rate 9.0 10.0 Total Broncos blankets Rams blankets Total e. Prepare the manufacturing overhead costs budget. Start by selecing the formula, and calculating the budgeted variable manufacturing overhead costs for March. Variable manufacturing overhead costs Now prepare the total manufacturing overhead cost budgets by entering the appropriate amounts then calculate the total manufacturing overhead costs. Manufacturing Overhead Budget For the Month of March Variable manufacturing overhead costs Fixed manufacturing overhead costs Total manufacturing overhead costs e. Prepare the manufacturing overhead costs budget. Start by selecing the formula, and calculating the budgeted variable manufacturing overhead costs for March. Variable manufacturing overhead costs Now prepare the total manufacturing overhead cost budgets by entering the appropriate amounts then calculate the total manufacturing overhead costs. Manufacturing Overhead Budget For the Month of March Variable manufacturing overhead costs Fixed manufacturing overhead costs Total manufacturing overhead costs Unit Costs of Ending Finished Goods Inventory March 31, 2017 Product Broncos Rams Cost per unit of input Total Input per unit of output 11 yds. Total Cost per unit of input 16 - 13 33 Wool 23 Input per unit of output 10 yds. 1 9 hrs. 9 hrs. Logo Direct manufacturing labor Fixed manufacturing overhead 10 hrs. 10 hrs. - Variable manufacturing overhead 9 hrs. 10 hrs. Total Trow prepare the ending invernomes puugel. Ending Inventories Budget March 31, 2017 Quantity Cost per unit Total Direct materials Red wool $ Black wool Broncos logo Rams logo Finished goods Broncos blankets Rams blankets Total ending inventory g. Prepare the cost of goods sold budget. Cost of Goods Sold Budget For the Month of March, 2017 Beginning finished goods inventory, March 1 Direct materials used Direct manufacturing labor Manufacturing overhead Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory, March 31 Cost of goods sold Requirement 2. Suppose Lynsay Specialties decides to incorporate continuous improvement into its budgeting process. Select two areas where it could incorporate continuous improvement into the budget schedules in requirement 1. O Direct manufacturing labor can incorporate continuous improvement by revising the budgeted usage of 9 hours and 10 hours on a monthly basis. To continually improve the direct material usage budget, the company should verify that the beginning inventory is as low as possible to decrease the materials used during production. Only by reducing the budget on a monthly basis for the amounts of fixed overhead can Lynsay Specialties continually improve fixed manufacturing overhead. Lynsay Specialties can continually improve variable manufacturing overhead by budgeting more efficient use of the allocation base. By increasing the target ending finished goods inventory, Lynsay Specialties will reduce the production budget therefore continually improve the direct material purchases budget. o