For the year 2020: 1. Prepare the revenues budget. (1 mark) 2. Use the revenues budget to: 1. find the budgeted allocation rate for marketing costs (1.5 marks) 2. find the budgeted number of deliveries and allocation rate for distribution costs. (3.5 marks) 3. Prepare the production budget in units. (2 marks) 4. Use the production budget to: 1. find the budgeted number of set-ups, set-up hours and the allocation rate for set-up costs (5 marks) 2. find the budgeted total machine-hours and the allocation rate for processing costs. (2.5 marks) 5. Prepare the direct materials usage budget and the direct materials purchases budget. (5 marks) 6. Use the direct materials usage budget to find the budgeted allocation rate for materials-handling costs. (2.5 marks) 7. Prepare the direct manufacturing labour cost budget. (1.5 marks) 8. Prepare the manufacturing overhead cost budget for materials handling, set-up and processing. (1.5 marks)

Answers for question 1- 4.

Can you help me with questions 5 - 8, please.

Thanks

Q.2 (Max Marks:60) Warsaw Ltd operates at capacity and makes glass-topped dining tables and wooden chairs, which are then typically sold as sets of four chairs with one table. However, some customers purchase replacement or extra chairs, and others buy some chairs or a table only, so the sales mix is not exactly 4.1. Warsaw Ltd is planning its annual budget for the financial year 2020. Information for 2020 is as follows: Input prices Direct materials Wood Glass $5.30 per board metre $11.5 per sheet $14 per direct manufacturing labour- hour Direct manufacturing labour Input quantities per unit of output Chairs Tables 1.2 board metres 1.7 board metres 2 sheets Direct materials Wood Glass Direct manufacturing labour Machine-hours (MH) 3 hours 2 MH 6 hours 5 MH Inventory information, direct materials Wood Glass Beginning inventory Target ending inventory 27 200 board metres 29 360 board metres 8 700 sheets 9 500 sheets Sales and inventory information, finished goods Chairs Tables 172 000 $70 45 000 $900 Expected sales in units Selling price Target ending inventory in units Beginning inventory in units 8 400 7 500 2 050 2 150 Chairs are manufactured in batches of 500 and tables are manufactured in batches of 50. It takes three hours to set up for a batch of chairs and two hours to set up for a batch of tables. Warsaw Ltd uses activity-based costing and has classified all overhead costs as shown in the table below: Budgeted variable Budgeted fixed Cost driver/allocation base Cost type Manufacturing Materials handling Set-up Processing Non- manufacturing Marketing Distribution $342 840 97 000 789 250 5600 000 300 740 5 900 000 Number of board metres used Set-up hours Machine-hours 2011 200 54 000 4 500 000 380 000 Sales revenue Number of deliveries Delivery trucks transport units sold in delivery sizes of 500 chairs or 500 tables. Revenue budget: Chairs Tables Total Expected sales in units a 172000 45000 Selling price 70 900 Sales revenue a*b 12040000 40500000 52540000 1 Budgeted allocation rate for marketing costs=Total marketing cost/Total sales revenue= (2011200+4500000)/52540000=$ 0.1239 per sales revenue Chairs Tables Total Expected sales in units 172000 45000 500 500 Units transported per delivery truck No. of deliveries Jalb 344 90 434 Budgeted allocation rate for distribution costs=Total distribution cost/Total number of doliorior- 3 Production budget in units: Chairs Tables Total Expected sales in units 172000 45000 Add: Target ending inventory 8400 2050 180400 47050 Less: beginning inventory 7500 2150 Production in units 172900 44900 217800 Chairs Tables Total Chairs Tables Total Production in units 172900 44900 Batch size 500 50 Number of batches c=a/b 346 898 Set up hors per batch 3 12 Set-up hours 1038 1796 2834 Budgeted allocation rate for set- up costs=Total set-up cost/Total set-up hours= (97000+300740)/2834=$ 140.3458 per set-up hour Chairs Tables Total Production in units 172900 44900 Machine hours per unit I b a*b 2 345800 Total machine hours 224500 570300 Budgeted allocation rate for processing costs=Total processing cost/Total machine hours= (789250+5900000)/570300=$ 11.7294 per machine hour