Question 1- Case Study (Total 18 marts) Adias Pty Ltd manufactures shower towels for two local football teams in Sydney. The towels are made from fabric with a logo designed by Bayswater Logo design company. The teams are as follows: 1 Vida Glow with black towels and the Vida Glow logo Champion: with blue towels and the Champion logo Also, the blue towels are slightly larger than the black towels. The budgeted direct-cost inputs for each towel in 2019 are as follows: Vida Glow shower towel LE Cha Black fabric (vard Blue fabric yard) Logo patches for each towel Direct manufacturing labor hours 4 15 Inventory at stock for Adias in March 2019 are as follows: Vida Glow shower towel 01/03/2019 3 103/2019 Champion shower towel 101/03/2019 31/03/2019 40 Black fabric tyard) Blue fabriclyard) Logo patches for each towel els 50 Unit cost data for direct-cost inputs pertaining to February 2019 and March 2019 are as follows: Feb2019 actual) March 2019 (budgeted) Black fabric (per yard) $10 $11 . Blue fabric per yard) 13. Logo patches for Vida Glow (Per patch) Logo for Champion (Per patch) Manufacturing labor cost per hour Manufacturing overhead is allocated on the basis of budgeted direct manufacturing labor hours per blanket. The budgeted variable manufacturing overhead rate for March 2019 $17 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2019 is $17,625. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. Finished goods inventory for March 2019 are as following. Beginning inventory in units | Beginning inventory in dollars Target ending inventory in units Vida Glow shower towel 14 $1960 24 Champion shower towel 20 $ 2945 30 Budgeted sales for March 2019 are 150 units of the Vida Glow towels and 205 units of the Champion shower towel. The budgeted selling prices per unit in March 2019 are $315 for the Vida Glow towels and $385 for the Champion towels. Assume the following in your answer. Work-in-process inventories are negligible and ignored. Direct materials inventory and finished goods inventory are costed using the FIFO method. Unit costs of direct materials purchased and finished goods are constant in March 2017 You need to: 1. Prepare the following budgets for March 2019 a Revenues budget (1 mark) b. Production budget in units (2 mark) c Direct material usage budget and direct materials purchases budget (3 mark) d. Direct manufacturing labor costs budget (1 mark) e Manufacturing overhead costs budget (2 mark) f. Ending inventories budget direct materials and finished goods) (3 mark) 9. Cost of goods sold budget (2 mark) 2. Suppose Adias Ply Ltd decides to incorporate continuous improvement into its budgeting process Describe two areas where it could incorporate continuous improvement into the budget schedules in requirement 1. (4 mark)
