Animal Transport 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: (Click the icon to view the information for the two products.) Animal Transport accounts for direct materials using a FIFO cost-flow assumption. (Click the icon to view the account information.) Input Prices Direct materials Plastic Metal Animal Transport uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these activities are $105 per setup-hour, $10 per machine-hour, and $15 per inspection-hour, respectively. Other information follows: (Click the icon to view the other information.) Read the requirements. 5 per pound $ 4 per pound Direct manufacturing labor $ 10 per direct manufacturing labor hour Cost Driver Information Number of units per batch Setup time per batch Cat-allac 25 1.50 hours Dog-errific 10 2.00 hours 0.5 hours Input Quantities per Unit of Output Cat-allac Dog-eriffic Direct materials Plastic Metal 4 pounds 0.5 pounds 6 pounds 1 pound Direct manufacturing labor-hours 3 hours Machine-hours (MH) 11 MH 5 hours 17 MH 1. Inspection time per batch 0.8 hour If necessary, round up to calculate number of batches. Operating (nonmanufacturing) fixed costs for March equal $38,000, half of which are salaries. Salaries are expected to increase 5% in April. Other operating fixed costs will remain the same. The only variable operating cost is sales commission, equal to 1% of sales revenue. Prepare the following for April: Revenues budget 2. Production budget in units Inventory Information, Direct Materials 4. 3. Direct material usage budget and direct material purchases budget Direct manufacturing labor cost budget Plastic Metal 5. Manufacturing overhead cost budgets for each of the three activities Beginning inventory Target ending inventory Cost of beginning inventory 290 pounds 60 pounds 6. Budgeted unit cost of ending finished goods inventory and ending inventories budget 390 pounds 50 pounds 7. Cost of goods sold budget 1,073 $ 174 8. Operating (nonmanufacturing) costs budget 9. Budgeted income statement (ignore income taxes) 10. Sales and Inventory Information, Finished Goods How does preparing the budget help Animal Transport's management team better manage the company? Cat-allac Dog-eriffic Expected sales in units 530 265 Selling price $ 205 $ 310 Target ending inventory in units 30 10 Beginning inventory in units 10 25 Beginning inventory in dollars $ 1,000 $ 4,650 Animal Transport uses a FIFO cost-flow assumption for finished-goods inventory.