Bramlett Company produces and sells two different product: Thingone and Thingtwo. Company uses two different production department dedicated for each product. All the other activities in the company are combined in two Support Departments. These Support Departments are responsible of supplying services to the production departments these costs are allocated to each department by using the manufacturing labor hour used. Addition to all the Company has Marketing and Distribution activity fixed costs S680,000 and $362,000 respectively. In 2014 the following data is gathered to prepare the 2015 budget: 2015 PROJECTED SALES Product Units Price Thingone 60.000 $165 Thingtwo 40.000 $220 2015 INVENTORIES IN UNITS Begining Inventory Ending Inventory 20,000 25.000 8,000 9,000 Budgeted Direct Unit Unit Materials Price AMOUNT USED PER 2015 INVENTORIES IN UNITS UNIT Thingone Thingtwo Begining Ending Inventory Inventory 4 5 32,000 36,000 2 3 29,000 32,000 0 6,000 7,000 A kg kg $12 $5 B unit $3 Product DIRECT MANUFACTURING LABOR HOURS Hours per Unit Rate per Hour 2 $16 3 $16 Thingone Thingtwo Fixed Variable Cost Cost Support Department Supl Sup2 $3 $1,200,000 $2.640,000 S2 Non- Fixed Variable Cost Thingone Thingtwo Manufacturing Cost Costs Marketing $400,000 Distribution $300,000 $2 S4 SOS 50,8 COMPANY'S ASSUMPTIONS IN PREPARATION OF THE BUDGET 1. The FIFO inventory method is used. 2. Direct Method used while allocating the support department costs to operating departments. 3. Cost of materials and labor are given as an average value therefore there is no price difference expected between months. PART A REQUIREMENTS: 1. Prepare the Revenues Budget. 2. Prepare the Production Budget (in Units) 3. Prepare the Direct Material Usage Budget and Direct Material Purchases Budget. 4. Prepare the Direct Manufacturing Labor Costs Budget. 5. Prepare the Manufacturing Overhead Costs Budget. 6. Prepare the Ending Inventories Budget. 7. Prepare the cost of Goods Sold Budget. 8. Prepare the Nonmanufacturing Cost Budget. 9. Prepare the Budgeted Income Statements. PART B REQUIREMENTS: For the given data below calculate all the variances for Level 1,2, and 3 analysis. Explain the performance of the company. 2015 ACTUAL SALES Product Price Units 58.000 2015 INVENTORIES IN UNITS Begining Inventory Ending Inventory 20,000 27,000 8.000 3.000 $167 Thingone Thingtwo 46,000 $218 Actual 2015 INVENTORIES IN UNITS Begining Ending Inventory Inventory Direct Unit Unit Materials Price Changes kg 32,000 30,000 4% increase B kg 3% 29,000 25,000 decrease unit No 6,000 5,000 change All other costs increase 8% comparing to the previous year's prices. But the workers are not happy with this new pricing policy and they slowed the work 4%. PART C REQUIREMENTS: With respect to actual data given in PART C calculate the number of sales from each unit if the company wants to increase the revenue 15%. Assume that the sales mix of budgetted data in PART A is attained
