Perplex Ltd operates at capacity and makes glass-topped dining tables and wooden chairs, which are then typically sold as sets of four chairs with one table. However, some customers purchase replacement or extra chairs, and others buy some chairs or a table only, so the sales mix is not exactly 4:1. Perplex Ltd is planning its annual budget for the financial year 2024. Information for 2024 is as follows:

Input prices Direct materials: Wood $5.50 per board metre Glass $14.5 per sheet Direct manufacturing labour: $18 per direct manufacturing labour hour

Input quantities per unit of output:

	Chairs	Tables
Direct materials:
Wood (board meters)	1.5	1.8
Glass (sheets)	0	2
Direct manufacturing:
Labour (hours)	4	7
Machine-hours (MH)	3	7

Inventory information, direct materials:

	Wood (board meters)	Glass (sheets)
Beginning inventory	26,100	8,900
Target ending inventory	29,350	9,600

Sales and inventory information, finished goods	Chairs	Tables
Expected sales in units	175,000	55,000
Selling price	$80	$950
Target ending inventory in units	8,500	2,150
Beginning inventory in units	7,600	2,050

Chairs are manufactured in batches of 500 and tables are manufactured in batches of 50. It takes four hours to set up for a batch of chairs and three hours to set up for a batch of tables. Perplex Ltd uses activity-based costing and has classified all overhead costs as shown in the table below:

Cost type	Budgeted variable	Budgeted fixed	Cost driver/allocation base
Manufacturing:
Materials handling	$343,840	$650,000	Number of board metres used
Set-up	98,000	305,740	Set-up hours
Processing	789,350	5,980,000	Machine-hours
Non-manufacturing:
Marketing	2,052,200	4,560,000	Sales revenue
Distribution	55,000	390,000	Number of deliveries

Delivery trucks transport units sold in delivery sizes of 500 chairs or 500 tables.

Required:

For the year 2024:

1. Prepare the revenues budget. (1 mark)
2. Use the revenues budget to: a) find the budgeted allocation rate for marketing costs (1.5 marks) b) find the budgeted number of deliveries and allocation rate for distribution costs. (3.5 marks)
3. Prepare the production budget in units. (2 marks)
4. Use the production budget to: a) find the budgeted number of set-ups, set-up hours and the allocation rate for set-up costs (5 marks) b) find the budgeted total machine-hours and the allocation rate for processing costs. (2.5 marks)
5. Prepare the direct materials usage budget and the direct materials purchases budget. (5 marks)
6. Use the direct materials usage budget to find the budgeted allocation rate for materials-handling costs. (2.5 marks)
7. Prepare the direct manufacturing labour cost budget. (1.5 marks)
8. Prepare the manufacturing overhead cost budget for materials handling, setup and processing. (1.5 marks)
9. Prepare the budgeted unit cost of finished good (16.5 marks) and ending inventories budget. (4.5 marks)
10. Prepare the cost of goods sold budget. (3 marks)