list Question 1 Question 2 K Xu Manufacturing Company manufactures blue rugs using wool and dye as direct materials. One rug is budgeted to use 40 skeins of wool at a cost of $4 per skaln and D 75 galions of dye at a cost of $8 per gallon All other materials are Indirect. At the beginning of the year, Xu has an inventory of 462,000 skeins of wool at a cost of $1,062,800 and 4,200 gallons of dye at a cost of $25,200. Target ending inventory of wool and dye is zero. Xu uses the FIFO inventory cost flow method. (Click the loan to view the additional information.) It budgets D.25 machine-hours to dye each skein in the dyeing process. There is no direct manufacturing labor cost for dyeing. Xu budgets 55 direct manufacturing labor-hours to weave a rug at a budgeted rate of $15 per hour. (Click the icon to view the budgeted overhead costs.) Read the requirements. Question 3 Requirement 1. Prepare a direct material usage budget in both units and dollars. Begin with the physical units portion then prepare the cost budget partion of the direct material usage budget. Direct Material Usage Budget In Quantity and Dollars Material Wool Dye Total Data table Physical Units Budget Direct materials required for Blue rugs The following table presents the budgeted overhead costs for the dyeing and weaving cost pools: Variable costs Indirect materials $ Maintenance Utilities Fixed costs Dyeing Weaving (based on 2,200,000 MH) (based on 12,100,000 DMLH) 0 $ 6,580,000 7,570,000 15,500,000 skeins gal More info Xu blue rugs are very popular and demand is high, but because of capacity constraints the firm will produ only 220,000 blue rugs per year. The budgeted seling price is 52,200 each. There are no ruge in beginning inventory. Target ending inventory of rugs is also zero. Xu makes rugs by hand, but uses a machina to dys the wool. Thus, overhead costs are accumulated in hv cost pools-one for dyeing and the other for weaving. Dyeing overhead is allocated to products based on machine-houre (MH). Weaving overhead is allocated to products based on direct manufacturing labor-hours (MLH). Requirements Print Done 1. Prepare a direct material usage budget in both units and dollars. 2. Calculate the budgeted overhead allocation rales for dyeing and weaving. 3. Calculate the budgeted unit cost of a blue rug for the year. 4. Prepare e revenues budget for blue rugs for the year, assuming Xu sells (a) 220.000 5,580,000 or (b) 195,000 blue rugs (that is, at two different sales levels). 5. Calculate the budgeted cast of goods sold for blue rugs under each sales assumption. 2.480.000 6. 7. Find the budgeted gross margin for blue rugs under each sales assumption. What actions might you take as a manager to improve profitability sales drap to 195.000 blue rugs? 8. How might top management at Xu use the budget developed in requirements 1-8 to batter manage the company? Indirect labor 367,000 1,810,000 Depreciation 2,120,000 280,000 743,000 55,830,000 Other $ 17,380,000 $ 31,480,000 Total budgeted costs