Makers Ltd. manufactures and sells two products, Abba and Baba. In July 2018 Makers'

Budget Department gathered the following data in order to prepare the individual budgets in

the master budget for 2019:

2019 Projected Sales:

Product Unit Price

Abba 80,000 $ 190

Baba 60,000 $ 270

2019 Inventories in Units:

Expected Target:

Product January 1, 2019 December 31, 2019

Abba 22,000 26,000

Baba 9,000 10,000

To produce 1 unit of Abba and Baba, the following direct materials are used:

Direct Material Unit Abba Baba

A Pounds 5 6

B Pounds 3 4

C Each 0 1

Projected data for 2019 with respect to direct materials are as follows:

Direct Material Purchase Price:

Target Inventories

January 1, 2019 December 31, 2019

A $14 33,000 pounds 37,000 pounds

B $ 6 28,000 pounds 30,000 pounds

C $ 4 6,000 units 7,000 units

Projected direct manufacturing labor requirements and rates for 2019 are as follows:

Product Hours per Unit Rate per Hour

Abba 3 $14

Baba 4 $18

Manufacturing overhead is allocated at the rate of $20 per direct manufacturing labor-hour.

Required:

1) Show the following budgets for 2019:

a) Revenue budget (in dollars)

b) Production budget (in units)

c) Direct materials purchases budget (in quantity)

d) Direct materials purchases budget (in dollars)

e) Direct manufacturing labor budget (in dollars)

2) By reference to 1 above, how would management use the Master budget?