Problem 2 (21 marks) Automatic Zoom Animal Gear 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: Input Prices Direct materials Plastic Metal per pound S 4 per pound Direct manufacturing labour Sio per direct manufacturing labour-hour Input Quantities per Unit of Output Cat-allac Dog-eric Direct materials Plastic Metal Direct manufacturing labour-hours Machine-hours (MH) 4 pounds 0.5 pounds 3 hours 11 MH 6 pounds I pound S hours 19 MH AULUIL 200m Inventory Information, Direct Materials Plastic Beginning inventory 290 pounds Target ending inventory 410 pounds Cost of beginning inventory S1,102 Metal 70 pounds 65 pounds $217 Animal Gear accounts for direct materials using a FIFO cost-flow assumption. Sales and Inventory Information, Finished Goods Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars Cat-allac 530 S 205 30 10 Dog-eriffie 225 $ 310 10 19 $4,650 $1,000 Animal Gear uses a FIFO cost-flow assumption for finished-goods inventory Animal Gear uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these activities are SIOS per setup-hour, S10 per machine-hour, and $15 per inspection-hour respectively. Other information follows: Cost-Driver Information Cat-allac 25 Number of units per batch Setup time per batch Inspection time per batch Dog erine 9 1.75 hours 0.7 hour 1.50 hours 0.5 hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $32,000, half of which are salaries Salaries are expected to increase 5% in April. Other nonmanufacturing fixed costs will remain the same. The only variable nonnanufacturing cost is sales commission equal to 1% of sales revenue. JU U. / hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $32,000, 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. Required Prepare the following for April: 1. Revenues budget 2. Production budget in units 3. Direct material usage budget and direct material purchases budget 4. Direct manufacturing labour cost budget 5. Manufacturing overhead cost budgets for each of the three activities 6. Cost of goods sold budget 7. Budgeted income statement (ignore income taxes) roblem 3 Profound Ltd. began manufacture of a new equipment know as Ferret. The company is using standard costing Problem 2 (21 marks) Automatic Zoom Animal Gear 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: Input Prices Direct materials Plastic Metal per pound S 4 per pound Direct manufacturing labour Sio per direct manufacturing labour-hour Input Quantities per Unit of Output Cat-allac Dog-eric Direct materials Plastic Metal Direct manufacturing labour-hours Machine-hours (MH) 4 pounds 0.5 pounds 3 hours 11 MH 6 pounds I pound S hours 19 MH AULUIL 200m Inventory Information, Direct Materials Plastic Beginning inventory 290 pounds Target ending inventory 410 pounds Cost of beginning inventory S1,102 Metal 70 pounds 65 pounds $217 Animal Gear accounts for direct materials using a FIFO cost-flow assumption. Sales and Inventory Information, Finished Goods Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars Cat-allac 530 S 205 30 10 Dog-eriffie 225 $ 310 10 19 $4,650 $1,000 Animal Gear uses a FIFO cost-flow assumption for finished-goods inventory Animal Gear uses an activity-based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these activities are SIOS per setup-hour, S10 per machine-hour, and $15 per inspection-hour respectively. Other information follows: Cost-Driver Information Cat-allac 25 Number of units per batch Setup time per batch Inspection time per batch Dog erine 9 1.75 hours 0.7 hour 1.50 hours 0.5 hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $32,000, half of which are salaries Salaries are expected to increase 5% in April. Other nonmanufacturing fixed costs will remain the same. The only variable nonnanufacturing cost is sales commission equal to 1% of sales revenue. JU U. / hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $32,000, 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. Required Prepare the following for April: 1. Revenues budget 2. Production budget in units 3. Direct material usage budget and direct material purchases budget 4. Direct manufacturing labour cost budget 5. Manufacturing overhead cost budgets for each of the three activities 6. Cost of goods sold budget 7. Budgeted income statement (ignore income taxes) roblem 3 Profound Ltd. began manufacture of a new equipment know as Ferret. The company is using standard costing
