a) calculate budgeted marketing costs

b) calculate budgeted distribution costs.

c) calculate budgeted operating income

Hazlett, Inc., operates at capacity and makes plastic combs and hairbrushes. Although the combs and brushes are a matching set, they are sold individually and so the sales mix is not 1:1. Hazlett's management is planning its annual budget for fiscal year 2018. Hazlett accounts for direct materials and ending finished goods using a FIFO cost flow assumption. Here is information for 2018: Input Prices Direct Materials Plastic Bristes Direct Labor $0.38 per ounce $0.71 per bunch $14 per hour Combs Brushes 5.8 ounces Input Consumption Direct Materials Plastic Bristes Direct Labor Machine Hours (MH) 8.1 ounces 18 lunches 0.21 hour 0.18 MH 0.058 hour 0.024 MH Inventory Beginning Inventory Target Ending Inventory Cost of Beginning Inventory Plastic 1,680 ounces 1.764 ounces $486 Bristles 1,810 bunches 2,282 bunches $1,119 Sales and Inventory Expected Sales in units Selling Price Target Ending Inventory in units Beginning Inventory in units Beginning Inventory in dollars Combs Brushes 12,800 14,100 SO $34 1.800 1.480 608 1.210 $2,700 $27.880 Combs are manufactured in batches of 200, and brushes are manufactured in batches of 100. It takes 28 minutes to set up for a batch of combs and 1 hour to set up for a batch of brushes. Hazlett uses activity-based costing and has classified all overhead costs as shown in the following table. Budgeted fixed overhead costs vary with capacity. Hazlett operates at capacity so budgeted fixed overhead cost per unit equals the budgeted fixed overhead costs divided by the budgeted quantities of the cost allocation base. Delivery trucks transport units sold in delivery sizes of 1,000 combs or 1,000 brushes. Manufacturing Cost Type Budgeted Variable Budgeted Fixed Materials handling $18,235 $22,100 Setup $10,445 $16,650 Processing $11,610 $38,000 Inspection $10.800 $1,510 Cost Driver / Allocation Base Numbers of ounces of plastic used Setup hours Machine hours Number of units produced Non-Manufacturing Cost Type Budgeted Variable Budgeted Fixed Marketing $24,150 $90,000 Distribution $1,180 Cost Driver/Allocation Base Sales revenue Number of deliveries