Liam Specialties manufactures, among otherthings, woolen blankets for the athletic teams of the two local high schools.

Additional Information

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:

Broncos with red blankets and the Broncos logo

Rams, with black blankets and the Rams logo

Also, the black blankets are slightly larger than the red blankets

Budgeted direct cost The budgeted direct-cost inputs for each product in 2017 are as follows:

	Broncos Blanket		Rams Blanket
Red wool fabric	12	yards	0	yards
Black wool fabric	0		13
Broncos logo patches	1		0
Rams logo patches	0		1
Direct manufacturing labor	11	hours	12	hours

Direct Materials Unit data pertaining to the direct materials for March 2017 are as follows:

Actual Beginning Direct Materials Inventory (3/1/2017)
	Broncos Blanket		Rams Blanket
Red wool fabric	75	yards	0	yards
Black wool fabric	0		55
Broncos logo patches	85		0
Rams logo patches	0		100

Target Ending Direct Materials Inventory (3/31/2017)
	Broncos Blanket		Rams Blanket
Red wool fabric	65	yards	0	yards
Black wool fabric	0		65
Broncos logo patches	65		0
Rams logo patches	0		65

Direct Cost Inputs Unit cost data for direct-cost inputs pertaining to February 2017 and March 2017 are as follows:

	February 2017 (actual)		March 2017 (budgeted)
Red wool fabric (per yard)	$17		$18
Black wool fabric (per yard)	28		27
Broncos logo patches (per patch)	15		15
Rams logo patches (per patch)	14		16
Manufacturing labor cost per hour	34		35

Manufacturing overhead (both variable and fixed) is allocated to each blanket on the basis of budgeted direct manufacturing labor-hours per blanket.

Overhead information

The budgeted variable manufacturing overhead rate for March 2017 is $ 24 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2017 is $47,700. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods.

Finished goods inventory

Data relating to finished goods inventory for March 2017 are as follows:

	Broncos Blanket		Rams Blanket
Beginning inventory in units	28		33
Beginning inventory in dollars (cost)	$5,880		$5,346
Target ending inventory in units	38		43

Additional Information

Budgeted sales for March 2017 are 210 units of the Broncos blankets and 230 units of the Rams blankets. The budgeted selling prices per unit in March 2017 are $1,124 for the Broncos blankets and $1,215 for the Rams 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 2017.

Requirements

1.	Prepare the following budgets for March 2017:
	a.	Revenues budget
	b.	Production budget in units
	c.	Direct material usage budget and direct material purchases budget
	d.	Direct manufacturing labor costs budget
	e.	Manufacturing overhead costs budget
	f.	Ending inventories budget (direct materials and finished goods)
	g.	Cost of goods sold budget
2.	Suppose Liam 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.