Lee Specialties manufactures, among other things, woolen blankets for the athletic teams of the two local high schools. The company sews the blankets from fabric and sews on a logo patch purchased from the licensed logo store site. The teams are as follows: (Click the icon to view team information.) Additional information follows: (Click the icon to view the budgeted direct-cost.) (Click the icon to view the direct materials.) (Click the icon to view the direct-cost inputs.) Manufacturing overhead (both variable and fixed) is allocated to each blanket on the basis of budgeted direct manufacturing labor-hours per blanket. The budgeted variable manufacturing overhead rate for March 2013 is $20 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2013 is $33,220. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. (Click the icon to view the finished goods inventory.) (Click the icon to view additional information.) Read the requirements. Knights, with red blankets and the Knights logo Raiders, with black blankets and the Raider logo Also, the black blankets are slightly larger than the red blankets. The budgeted direct-cost inputs for each product in 2013 are as follows: Knights Blanket Red wool fabric Black wool fabric Knight logo patches Raider logo patches Direct manufacturing labor 8 yards 0 1 Raiders Blanket 0 9 yards 0 0 1 7 hours 8 hours Unit data pertaining to the direct materials for March 2013 are as follows: Actual Beginning Direct Materials Inventory (3/1/2013) Knights Blanket Red wool fabric Black wool fabric Knight logo patches Raider logo patches 55 yards 0 65 0 Raiders Blanket 0 yards 35 0 80 Target Ending Direct Materials Inventory (3/31/2013) Raiders Blanket Knights Blanket Red wool fabric 45 yards 0 yards Black wool fabric 0 45 Knight logo patches 45 0 Raider logo patches 0 45 Unit cost data for direct-cost inputs pertaining to February 2013 and March 2013 are as follows: February 2013 (actual) Red wool fabric (per yard) Black wool fabric (per yard) Knight logo patches (per patch) Raider logo patches (per patch) Manufacturing labor cost per hour $ 13 20 11 March 2013 (budgeted) $ 14 19 11 10 12 30 31 Data relating to finished goods inventory for March 2013 are as follows: Knights Blanket Raiders Blanket Beginning inventory in units 20 25 Beginning inventory in dollars (cost) $ 3,400 3,950 Target ending inventory in units 30 35 Budgeted sales for March 2013 are 170 units of the Knights blankets and 210 units of the Raiders blankets. The budgeted selling prices per unit in March 2013 are $622 for the Knights blankets and $724 for the Raiders blankets. Assume the following in your answer: Work-in-process inventories are negligible and ignored. Direct materials inventory and finished goods inventory are costed using the FIFO method. Unit costs of direct materials purchased and finished goods are constant in March 2013. 1. 2. Prepare the following budgets for March 2013: e. f. g. Revenues budget Production budget in units Direct material usage budget and direct material purchas Direct ganufacturing labor budget Manufacturing overhead budget Ending inventories budget (direct materials and finished goods) Cost of goods sold budget Suppose Lee Specialties decides to incorporate continuous improvement into its budgeting process. Describe two areas where it could incorporate continuous improvement into the budget schedules in requirement 1