Slatts, Inc., manufactures and sells snowboards. Slatts manufactures a single model, the Pipex. In the summer of 2011, Slatts' management accountant gathered the following data to prepare budgets for 2012:

Materials and Labor Requirements

Direct materials:

Wood 13 board feet (b.f.) per snowboard

Fiberglass 11 yards per snowboard

Direct manufacturing labor 7 hours per snowboard

Slatts' management expects to sell 3,400 snowboards during 2012 at an estimated retail price of $1,000

per board. Furthermore, the CEO expects 2012 beginning inventory of 700 snowboards and would like to end 2012 with 800 snowboards in stock.

Direct Materials Inventories
	Beginning Inventory 1/1/2012		Ending Inventory 12/31/2012
Wood	2,060	b.f.	1,560	b.f.
Fiberglass	1,060	yards	2,060	yards

Variable manufacturing overhead is $16 per direct manufacturing labor-hour. There are also $98,000 in fixed manufacturing overhead costs budgeted for 2012. Slatts combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $310 per sales visit. The marketing plan calls for 40 sales visits during 2012. Finally, there are $37,000 in fixed nonmanufacturing costs budgeted for 2012.

2011 Unit Price 2012 Unit Price

Wood $34.00per b.f. $36.00per b.f.

Fiberglass $10.00per yard $11.00per yard

Direct manufacturing labor $30.00per hour $31.00per hour

The inventoriable unit cost for ending finished goods inventory on December 31, 2011, is $200.00.

Assume Slatts uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations.

REQUIRED

1.	Prepare a direct manufacturing labor budget for 2012.
2.	Prepare a manufacturing overhead budget for 2012.
3.	What is the budgeted manufacturing overhead rate for 2012?