Requirements

1.	Prepare the following budgets for March 2017:
	a.	Revenues budget
	b.	Production budget in units
	c.	Direct material usage budget and direct material purchases budget
	d.	Direct manufacturing labor costs budget
	e.	Manufacturing overhead costs budget
	f.	Ending inventories budget (direct materials and finished goods)
	g.	Cost of goods sold budget
2.	Suppose Hale Specialties 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.

Requirement 2. Suppose

Hale Specialties decides to incorporate continuous improvement into its budgeting process. Select two areas where it could incorporate continuous improvement into the budget schedules in requirement 1.

Choices:

A) To continually improve the direct material usage budget, the company should verify that the beginning inventory is as low as possible to decrease the materials used during production.

B) By increasing the target ending finished goods inventory, Hale Specialties will reduce the production budget therefore continually improve the direct material purchases budget.

C) Hale Specialties can continually improve variable manufacturing overhead by budgeting more efficient use of the allocation base.

D) Only by reducing the budget on a monthly basis for the amounts of fixed overhead can Hale Specialties continually improve fixed manufacturing overhead.

E) Direct manufacturing labor can incorporate continuous improvement by revising the budgeted usage of 4 hours and 5 hours on a monthly basis.

***Please answer all requirement parts!***

Part c looks like this:

Direct Material Usage Budget in Quantity and Dollars
For the Month of March
	Material
					Broncos		Rams
	Red wool		Black wool		logo patches		logo patches		Total
Physical Units Budget
Direct materials required for
Broncos	??	yds.	??	yds.	??		??
Rams	??	yds.	??	yds.	??		??
Total quantity of direct material to be used	??	yds.	??	yds.	??		??

Cost Budget
Available from beginning direct materials inventory
(under a FIFO cost-flow assumption)
Broncos	??		??		??		??
Rams	??		??		??		??
To be purchased this period
Broncos	??		??		??		??
Rams	??		??		??		??
Direct materials to be used this period	??		??		??		??		??

Hale Specialties manufactures, among other things, woolen blankets for the athletic teams of the two local high schools. The company sews the blankets from fabric and sews on a logo patch purchased from the licensed logo store site. The teams are as follows: Broncos, with red blankets and the Broncos logo Rams, with black blankets and the Rams logo Also, the black blankets are slightly larger than the red blankets. The budgeted direct-cost inputs for each product in 2017 are as follows: Rams Blanket O yards Red wool fabric Black woolfabric Broncos logo patches Rams logo patches Direct manufacturing labor Broncos Blanket 5 yards 0 1 0 4 hours 0 1 5 hours Unit data pertaining to the direct materials for March 2017 are as follows: Actual Beginning Direct Materials Inventory (2/1/2017) Bronces Blanket Rams Blanket Red woolfabric 40 yards Oyards Black wool fabric 0 20 Broncos logo patches 0 Rams logo patches 0 65 Target Ending Direct Materials Inventory (331/2017) Bronces Blanket Rams Blanket Red woolfabric 30 yards yards Black wool fabric 0 20 Broncos logo patches 30 0 Rams logo patches 0 30 Unit cost data for direct-cost inputs pertaining to February 2017 and March 2017 are as follows: Red wool fabric (per yard) Blackwoolfabric per yard) Broncos lago patches (per patch Rams logo patches (per patch) Manufacturing labor cost per hour February 2017 actual) S10 14 8 7 27 March 2017 (budgeted $11 13 8 Manufacturing overhead (both variable and fixed) is allocated to each blanket on the basis of budgeted direct manufacturing labor-hours per blanket. The budgeted variable manufacturing overhead rate for March 2017 is $17 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2017 is $14,625. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. Data relating to finished-goods inventory for March 2017 are as follows: Broncos Blankets Rams Blankets Beginning inventory in units 14 19 Beginning inventory in dollars (cost) $1,960 $2,945 Target ending inventory in units 24 29 Budgeted sales for March 2017 are 140 units of the Broncos blankets and 195 units of the Rams blankets. The budgeted selling prices per unit in March 2017 are $305 for the Broncos blankets and $378 for the Rams blankets. 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