Question.

The Cool Items company makes two portable music players, the Beatbox and the Boombox. They are both made of plastic with metal handhold, but the Beatbox is smaller.Information for the two products for the month of August is given in the following tables:

You should choose the input prices between 1-10 dollars by yourself. Afterward, solve the question according to those prices. Be careful about the probability of choosing the same numbers with your friend is %1. Please solve the question with your efforts.

Input Prices

Direct materials

Plastic $ --- per pound

Metal $ --- per pound

Direct manufacturing labor $10 per direct manufacturing labor-hour

Input Quantities per Unit of Output

Beatbox Boombox

Direct materials

Plastic 3 pounds 5 pounds

Metal 0.5 pounds 1 pound

Direct manufacturing labor-hours 4 hours 6 hours

Machine-hours (MH) 10 MH 18 MH

Inventory Information, Direct Materials

Plastic Metal

Beginning inventory 300 pounds 80 pounds

Target ending inventory 400 pounds 75 pounds

Cost of beginning inventory $1,204 $235

The Cool Items accounts for direct materials using a FIFO cost flow assumption.

Sales and Inventory Information, Finished Goods

Choose the Selling Price by yourself between $200 - $300

Gint: Boombox should be more expensive!

Beatbox Boombox

Expected sales in units 520 215

Selling price 250 275

Target ending inventory in units 30 10

Beginning inventory in units 10 25

Beginning inventory in dollars $1,000 $4,650

The Cool Items uses a FIFO cost flow assumption for finished goods inventory.

ired

The Cool Items uses an activity-based costing system and classifies overhead into three activity pools:

Setup, Processing, and Inspection. Activity rates for these activities are $105 per setup-hour, $10 per

machine-hour, and $15 per inspection-hour, respectively. Other information follows:

Cost-Driver Information

Beatbox Boombox

Number of units per batch 28 12

Setup time per batch 1.75 hours 2 hours

Inspection time per batch 0.5 hour 0.7 hour

Nonmanufacturing fixed costs for July equal $36,000, half of which are salaries. Salaries are expectedto increase 4% in August. The only variable nonmanufacturing cost is sales commission, equal to 1,2% of salesrevenue.

Prepare the following for August:

1. Revenues budget

2. Production budget in units

3. Direct material usage budget and direct material purchases budget

4. Direct manufacturing labor cost budget

5. Manufacturing overhead cost budgets for each of the three activities

6. Budgeted unit cost of ending finished goods inventory and ending inventories budget

7. Cost of goods sold budget

8. Nonmanufacturing costs budget

9. Budgeted income statement (ignore income taxes)

10. How does preparing the budget help The Cool Items management team better manage the company?