Animal Gear 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

Input Prices

Direct materials

Plastic

$4

per pound

Metal

$3

per pound

Direct manufacturing labor

$14

per direct manufacturing labor hour

Input Quantities per Unit of Output

Cat-allac

Dog-eriffic

Direct materials

Plastic

3

pounds

5

pounds

Metal

0.5

pounds

1

pound

Direct manufacturing labor-hours (DMLH)

3

hours

5

hours

Machine-hours (MH)

13

MH

20

MH

Inventory Information, Direct Materials

Plastic

Metal

Beginning inventory

230

pounds

80

pounds

Target ending inventory

410

pounds

70

pounds

Cost of beginning inventory

$920

$256

Animal Gear accounts for direct materials using a FIFO cost-flow assumption

Sales and Inventory Information, Finished Goods

Cat-allac

Dog-eriffic

Expected sales in units

580

215

Selling price

$190

$260

Target ending inventory in units

45

25

Beginning inventory in units

25

40

Beginning inventory in dollars

$2,500

$7,440

Animal Gear uses a FIFO cost-flow assumption for finished-goods inventory.

Animal Gear 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-errific

Number of units per batch

25

10

Setup time per batch

1.25

hours

2

hours

Inspection time per batch

0.5

hours

0.6

hour

If necessary, round up to calculate number of batches.

Nonmanufacturing fixed costs for March equal

$38,000

half of which are salaries. Salaries are expected to increase

5%

in April. Other nonmanufacturing fixed costs will remain the same. The only

variable nonmanufacturing cost is sales commission, equal to

1%

of sales revenue.

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)
10.		How does preparing the budget help Animal Gear's management team better manage the company?

Cost Budget
Available from beginning direct materials inventory
(under a FIFO cost-flow assumption)
Plastic	$920
Metal			$256
To be purchased this period
Plastic	????
Metal			????
Direct materials to be used this period	????		?????		????
Now prepare the direct material purchases budget.
Direct Materials Purchases Budget
For the Month of April
		Materials
		Plastic		Metal		Total
Physical Units Budget
To be used in production		2,800	lbs.	500	lbs.
Add target ending inventory		410	lbs.	70	lbs.
Total requirement		3,210	lbs.	570	lbs.
Deduct beginning inventory		230	lbs.	80	lbs.
Purchases to be made		2,980	lbs.	490	lbs.
Cost Budget
Purchases		????		????		$13,390
Requirement 4. Prepare the direct manufacturing labor cost budget.
Direct Manufacturing Labor Costs Budget
For the Month of April
	Output units		DMLH		Total		Hourly
	produced		per unit		hours		wage rate		Total
Cat-allac	600		3		1,800		$14		$25,200
Dog-eriffic	200		5		1,000		14		14,000
Total									$39,200
Requirement 5. Prepare the manufacturing overhead cost budgets for each of the three activities.
Begin the manufacturing overhead cost budgets for each of the three activities by first calculating the total setup time.
		Cat-allac			Dog-errific		Total
Units to be produced		600			200
Units per batch	/	25		/	10
Number of batches		24			20
Setup time per batch	x	1.25	hrs.	x	2	hrs.
Total setup time		30	hrs.		40	hrs.	70	hrs.