Budget Problem

Camarero Horse Race LLC a subsidiary of Hippodrome Camarero makes transportations trailers for the racehorses, the Single

trailer, and the Double trailer. They are both made of aluminon with metal doors, where in the single trailer only can transport one

horse while in the double can transport two horses. The data for the two trailers for the year $2023$ is given in the following tables.

Direct materials

Aluminon $8$$ Per pound

Metal $6$ $ Per pound

Direct manufactiuring labor $$28$ Per direct manufacturing labor$-$hour

Resources Quantities Per Units of Output

Direct material

Aluminon $6$ pounds

Metal $1$ pounds

Direct manufacturing labor hours $($DMLH$)6$ hours

Machine hours

Single Trailer

$13MH$

Double Trailer

$10$ pounds

$2$ pounds

$10$ hours

$20MH$

Inventory Information, Direct Materials

Aluminon

Beginning inventory

Target ending inventory

Cost of beginning inventory

$460$ pounds

$800$ pounds

$$1,748$

Metal

$140$ pounds

$130$ pounds

$$448$

Camarero Horse Race LLC accounts for direct materials using FIFO cost flow assumption

Sales and Inventory, Information, Finished Goods

Single Trailer

Expected sales in units

Selling Price

Target ending inventory in units

Beginning invetory in units

Beginning invetory in dollars

$1160$

$$380$

$45$

$25$

$$5,000$

Double Trailer

$480$

$$550$

$25$

$40$

$$14,880$

Camarero Horse Race LLC uses FIFO cost flow assumption for finished goods inventory.

Camarero Horse Race LLC uses an activity$-$based costing and classifies overhead onto three activity pools: Setup, Processing,

and Inspection. Activity rates for these activities are $$130$ per setup, $$5$ per machine hour, and $$20$ per inspection hour

respectively. Other information follows:

Cost Driver Information

Number of units per batch

Setup time per batch

Inspection time per batch

Single Trailer

$25$

$1\mathrm{.}25$ hours

$0\mathrm{.}5$ hours

Double Trailer

$13$

$2\mathrm{.}00$ hours

$0\mathrm{.}6$ hours

Nonmanufacturing fixed cost for year $2022$ equal $$32,000,$ of which half are salaries. Salaries are expected to increase $5\%$ in year

The only variable nonmanufacturing cost is sales commission, equal to $1\%$ of sales revenue.

Top management request that executives of the different departments works together with

management accountant team in the following budgets for the year $2023$:

Find Manufacturing overhead cost budgets for each of the three activities