Prepare the Direct Material Usage Budget and Manufacturing Overhead Costs Budget.

Bramlett Company produces and sells two different product: Thingone and Thingtwo. Company uses two different production department dedicated for each product. All the other activities in the company are combined in two Support Departments. These Support Departments are responsible of supplying services to the production departments these costs are allocated to each department by using the manufacturing labor hour used. Addition to all the Company has Marketing and Distribution activity fixed costs $680,000 and $362,000 respectively. In 2014 the following data is gathered to prepare the 2015 budget: 2015 INVENTORIES IN UNITS 2015 PROJECTED SALES Product Units Price Begining Inventory 20,000 Ending Inventory 25,000 Thingone 60,000 $165 Thingtwo 40,000 $220 8,000 9,000 Budgeted AMOUNT USED PER 2015 INVENTORIES IN UNITS UNIT Direct Unit Unit Thingone Thingone Thingtwo Ending Materials Price Begining Inventory 32,000 Inventory A kg $12 4 5 36,000 B kg $5 2 3 29,000 32,000 unit $3 0 1 6,000 7,000 COMPANY'S ASSUMPTIONS IN PREPARATION OF THE BUDGET 1. The FIFO inventory method is used. 2. Direct Method used while allocating the support department costs to operating departments. 3. Cost of materials and labor are given as an average value therefore there is no price difference expected between months. DIRECT MANUFACTURING LABOR HOURS Product Hours per Unit Rate per Hour 2 $16 Thingone Thingtwo 3 $16 Variable Fixed Cost Cost Support Department Sup1 Sup2 $1,200,000 $3 $2,640,000 $2 Variable Cost Non- Fixed Manufacturing Cost Costs Thingone Thingtwo $400,000 $2 $4 Marketing Distribution $300,000 $0,5 $0,8