Step by step solution to Question 28 in Chapter 6 for Cost Accounting (978-0-13-210917-8).

I'll make sure to get you a fist bump and ask another simple question for another 1,500 points to whoever can help me out with this question.

I need to understand every step for an exam coming up. Help is greatly appreciated!

See below - which is copied and pasted from the book:

6-28 Budgetschedulesforamanufacturer.LogoSpecialtiesmanufactures,amongotherthings,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:

Knights, with red blankets and the Knights logo

Raiders, with black blankets and the Raider logo ?Also, the black blankets are slightly larger than the red blankets. The budgeted direct-cost inputs for each product in 2012 are as follows: ?Unit data pertaining to the direct materials for March 2012 are as follows:

Requi

Knights Blanket Raiders Blanket

Red wool fabric 3 yards 0

Black wool fabric 0 3.3 yards

Knight logo patches 1 0

Raider logo patches 0 1

Direct manufacturing labor 1.5 hours 2 hours

Actual Beginning Direct Materials Inventory (3/1/2012)

Knights Blanket Raiders Blanket

Red wool fabric 30 yards 0

Black wool fabric 0 10 yards

Knight logo patches 40 0

Raider logo patches 0 55

Target Ending Direct Materials Inventory (3/31/2012)

Knights Blanket Raiders Blanket

Red wool fabric 20 yards 0

Black wool fabric 0 20 yards

Knight logo patches 20 0

Raider logo patches 0 20

Unit cost data for direct-cost inputs pertaining to February 2012 and March 2012 are as follows:

February 2012 (actual) March 2012 (budgeted)

Red wool fabric (per yard) $8 $9

Black wool fabric (per yard) 10 9

Knight logo patches (per patch) 6 6

Raider logo patches (per patch) 5 7

Manufacturing labor cost per hour 25 26

MASTER BUDGET AND RESPONSIBILITY ACCOUNTING

Knights Blankets Raiders Blankets

Beginning inventory in units 10 15

Beginning inventory in dollars (cost) $1,210 $2,235

Target ending inventory in units 20 25

Required

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 2012 is $15 per direct manufacturing labor-hour. The budgeted fixed manufacturing overhead for March 2012 is $9,200. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods.

Data relating to finished goods inventory for March 2012 are as follows:

Budgeted sales for March 2012 are 120 units of the Knights blankets and 180 units of the Raiders blankets. The budgeted selling prices per unit in March 2012 are $150 for the Knights blankets and $175 for the Raiders 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 2012.

1. Prepare the following budgets for March 2012:?a. Revenues budget?b. Production budget in units?c. Direct material usage budget and direct material purchases budget d. Direct manufacturing labor budget

e. Manufacturing overhead budget?f. Ending inventories budget (direct materials and finished goods)

g. Cost of goods sold budget

2. SupposeLogoSpecialtiesdecidestoincorporatecontinuousimprovementintoitsbudgetingprocess. Describe two areas where it could incorporate continuous improvement into the budget schedules in requirement 1.