Arsoy 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. Yesari Asm Bey, the CFO of Arsoy Inc., is planning the company's annual budget for fiscal year 2018. Arsoy Inc. 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 $0.31 per ounce $0.73 per bunch $10 per hour Direct Labor Input Consumption Direct Materials Combs Brushes 5.1 ounces Plastic Bristes Direct Labor Machine Hours (MH) 8.3 ounces 19 bunches 0.23 hour 0.19 MH 0.051 hour 0.020 MH Plastic Bristles Inventory Beginning Inventory 1,610 ounces Target Ending Inventory 1.760 ounces Cost of Beginning Inventory $0.33 per ounce 1,830 bunches $0.70 per bunch 2,292 bunches Sales and Inventory Expected Sales in units Selling Price Target Ending Inventory in units Beginning Inventory in units Beginning Inventory in dollars Combs Brushes 12,100 14,300 $9 $30 1.900 1,410 601 1,230 $2.700 $27,980 Combs are manufactured in batches of 200, and brushes are manufactured in batches of 100. It takes 21 minutes to set up for a batch of combs and 61 minutes to set up for a batch of brushes. Arsoy Inc. uses activity-based costing and has classified all overhead costs as shown in the following table. Budgeted fixed overhead costs vary with capacity. Arsoy Inc. 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 sizes of 1,000 for both combs and brushes. Manufacturing Cost Type Budgeted Variable Budgeted Fixed Cost Driver/Allocation Base Materials handling $11,235 $22,300 Numbers of ounces of plastic used Setup $16,650 Setup hours Processing $39,000 Machine hours Inspection Number of units produced $10,045 $11,640 $10,100 $1,530 Non-Manufacturing Cost Type Marketing Distribution Budgeted Variable $0.10 per each $1 of sales revenue $119 per each delivery Budgeted Fixed Cost Driver/Allocation Base Sales revenue Number of deliveries Q-1) Calculate budgeted dollar cost of DM purchase! Q-2) Calculate budgeted dollar cost of ending inventory Q-3) Calculate budgeted cost of goods sold. Q-4) Calculate budgeted operating income