Animal Transport Company makes two pet carriers, the Cat-allac and the Dog-errific. They are both made of plastic with metal doors, the 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 $5 per pound

Metal $4 per pound

Direct manufacturing labor $10 per direct manufacturing labour hour

Input Quantities per unit of Output

Direct Materials Cat Dog

Plastic 4 lbs. 6 lbs.

Metal .5 lbs. 1 lb.

DMLH 3 hrs. 5 hrs.

MH 11 MH 17 MH

Inventory Information, Direct Materials

Plastic Metal

Beg inv 280 lbs 80 lbs.

Target end inv. 380 lbs. 75 lbs.

Cost of beg inv. $1,176 $224

Animal Transport accounts for direct materials using a FIFO cost flow assumption

Cat Dog

Expected sales in units 530 265

Selling price $205 $310

Target ending inv in units 30 10

Beg inv. in units 10 25

Beg inv. in $$ $1,000 $4,650

Animal Transport uses ana 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:

Cat Dog

Number of units per batch 25 10

setup time per batch 1.5 hrs 2 hrs

inspection time per batch .5 hrs .8 hr

If necessary, round up to calculate number of batches.

Nonmanfacturing fixed costs for March equal $30,000, 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 statemetn (ignore income taxes)

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