Pet Transport Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac is smaller. Information for the two products for the month of April is given in the following tables: (Click the icon to view the information for the two products.) Pet Transport accounts for direct materials using a FIFO cost-flow assumption. (Click the icon to view the account information.) Pet Transport uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these activities are $130 per setup-hour, $5 per machine-hour, and $20 per inspection-hour, respectively. Other information follows: (Click the icon to view the other information.) Read the requirements. Requirement 1. Prepare the revenues budget. Revenues Budget For the Month of April Units Selling price Total revenues Cat-allac 580 $ 190 Dog-eriffic 215 260 Total Product Information Input Prices Direct materials Plastic Metal Direct manufacturing labor Input Quantities per Unit of Output $ 4 per pound $ 3 per pound $ 14 per direct manufacturing labor hour Cat-allac Dog-eriffic Direct materials Plastic 3 pounds 5 pounds Metal 0.5 pounds 1 pound Direct manufacturing labor-hours (DMLH) 3 hours 5 hours 13 MH 20 MH Machine-hours (MH) Inventory Information, Direct Materials Plastic Metal Beginning inventory Target ending inventory 290 pounds 60 pounds 380 pounds 50 pounds Cost of beginning inventory 1,189 $ 174 Account Information Sales and Inventory Information, Finished Goods Cat-allac Dog-eriffic Expected sales in units 580 215 Selling price $ 190 $ 260 Target ending inventory in units 45 25 Beginning inventory in units 25 40 Beginning inventory in dollars $ 2,500 $ 7,440 Pet Transport uses a FIFO cost-flow assumption for finished-goods inventory. Other information Cost Driver Information Cat-allac Dog-errific Number of units per batch 25 10 Setup time per batch 1.25 hours 2.00 hours Inspection time per batch 0.5 hours 0.6 hour I If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $38,000, half of which are salaries. Salaries are expected to increase 5% in April. Other nonmanufacturing fixed costs will remain the same. The only variable nonmanufacturing cost is sales commission, equal to 1% of sales revenue. Requirements Prepare the following for April: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Revenues budget Production budget in units Direct material usage budget and direct material purchases budget Direct manufacturing labor cost budget Manufacturing overhead cost budgets for each of the three activities Budgeted unit cost of ending finished goods inventory and ending inventories budget Cost of goods sold budget Nonmanufacturing costs budget Budgeted income statement (ignore income taxes) How does preparing the budget help Pet Transport's management team better manage the company?