How do I solve for the cost budget?
x P6-40 (similar to) Question Help Pet Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac is smaller. Pet Gear uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these Information for the two products for the month of April is given in the following tables: activities are $105 per setup-hour, $10 per machine-hour, and $15 per inspection-hour, respectively. Other information follows: (Click the icon to view the information for the two products.) (Click the icon to view the other information.) Pet Gear accounts for direct materials using a FIFO cost-flow assumption. Read the requirements (Click the icon to view the account information.) Deduct beginning finished goods inventory Units of finished goods to be produced 550 250 Product Information - X Other information - X Requirement 3. Prepare the direct material usage budget and direct material purchases budget. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. Input Prices Cost Driver Information Direct Material Usage Budget in Quantity and Dollars Direct materials Cat-allac Dog-errific For the Month of April Plastic $ 5 per pound Number of units per batch 25 10 Material Metal $ 4 per pound Setup time per batch 1.50 hours 2.00 hours Plastic Metal Total Direct manufacturing labor $ 10 per direct manufacturing labor hour Inspection time per batch 0.5 hours 0.8 hour Physical Units Budget Input Quantities per Unit of Output If necessary, round up to calculate number of batches Direct materials required for Cat-allac Dog-eriffic Nonmanufacturing fixed costs for March equal $30,000, half of which are salaries. Salaries are expected to increase 5% in April. Other nonmanufacturing fixed costs Cat-allac 2,200 Ibs. 275 Ibs. Direct materials will remain the same. The only variable nonmanufacturing cost is sales Dog-errific 1,500 bs. Ibs. Plastic 4 pounds 6 pounds commission, equal to 1% of sales revenue. Total quantity of direct material to be used 3,700 Ibs. 525 Ibs Metal 0.5 pounds 1 pound i Account Information - X Cost Budget Direct manufacturing labor-hours (DMLH) 3 hours 5 hours Available from beginning direct materials inventory Machine-hours (MH) 11 MH 19 MH (under a FIFO cost-flow assumption) Inventory Information, Direct Materials Sales and Inventory Information, Finished Goods Plastic 3700 Plastic Metal Cat-allac Dog-eriffic Metal 525 Beginning inventory 270 pounds 80 pounds Expected sales in units 530 265 To be purchased this period Target ending inventory 360 pounds 75 pounds Selling price $ 205 $ 310 Plastic Cost of beginning inventory $ 999 $ 256 Target ending inventory in units 30 10 Metal Beginning inventory in units 10 25 Direct materials to be used this period Print Done Beginning inventory in dollars 1,000 $ 4,650 Pet Gear uses a FIFO cost-flow assumption for finished-goods inventory
