The following table presents the budgeted overhead costs for the dyeing and weaving cost pools: Dyeing (based on 2,200,000 MH) Weaving (based on 12,100,000 DMLH) $ 0 $ 6,580,000 7,570,000 15,500,000 5,560,000 2,480,000 Variable costs Indirect materials Maintenance Utilities Fixed costs Indirect labor Depreciation Other 367,000 2,120,000 743,000 17,380,000 $ 1,810,000 280,000 5,830,000 $ 31,460,000 Total budgeted costs Print Done i Requirements - X 1. Prepare a direct material usage budget in both units and dollars. 2. Calculate the budgeted overhead allocation rates for weaving and dyeing. 3. Calculate the budgeted unit cost of a blue rug for the year. 4. Prepare a revenues budget for blue rugs for the year, assuming Xavier sells (a) 220,000 or (b) 195,000 blue rugs (that is, at two different sales levels). 5. Calculate the budgeted cost of goods sold for blue rugs under each sales assumption 6. Find the budgeted gross margin for blue rugs under each sales assumption. 7. What actions might you take as a manager to improve profitability if sales drop to 195,000 blue rugs? 8. How might top management at Xavier use the budget developed in requirements 1-6 to better manage the company? Xavier blue rugs are very popular and demand is high, but because of capacity constraints the firm will produce only 220,000 blue rugs per year. The budgeted selling price is $2,200 each. There are no rugs in beginning inventory. Target ending inventory of rugs is also zero. Xavier makes rugs by hand, but uses a machine to dye the wool. Thus, overhead costs are accumulated in two cost poolsone for weaving and the other for dyeing. Weaving overhead is allocated to products based on direct manufacturing labor-hours (DMLH). Dyeing overhead is allocated to products based on machine-hours (MH). Requirement 1. Prepare a direct material usage budget in both units and dollars. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. Direct Material Usage Budget in Quantity and Dollars Material Wool Dye Total Physical Units Budget Direct materials required for 8,800,000 165,000 Blue rugs skeins Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) Wool $ 1,062,600 Dye 25,200 To be purchased this period Wool 33.352.000 gal $ Enter any number in the edit fields and then click Check Answer. Read the regy Dye 1,286,400 Direct materials to be used this period $ 34,414,600 $ 1,311,600 $ 35,726,200 Requirement 2. Calculate the budgeted overhead allocation rates for weaving and dyeing. Begin by determining the formula, then calculate the budgeted overhead allocation rate for weaving. (Round your answer to the nearest cent.) Total budgeted overhead costs Direct manuf. labor hours = Budgeted manufacturing overhead rate $ 31,460,000 12,100,000 = $ 2.60 1 Begin by determining the formula, then calculate the budgeted overhead allocation rate for dyeing. (Round your answer to the nearest cent.) Total budgeted overhead costs Machine hours Budgeted manufacturing overhead rate $ 17,380,000 2,200,000 7.9 Requirement 3. Calculate the budgeted unit cost of a blue rug for the year. (Round your answers to two decimal places.) Cost per Input per Budgeted unit of input unit of output unit cost Wool $ 40 160.00 0.75 6.00 = 4 69 Dve 8 VUOI 8 0.75 6.00 15 x 55 825.00 Dye Direct manufacturing labor Dyeing overhead Weaving overhead 7.9 x 10.00 = 79.00 2.60 x 55 143.00 $ 1,213.00 Total Requirement 4. Prepare a revenue budget for blue rugs for the year, assuming Xavier sells (a) 220,000 or (b) 195,000 blue rugs (that is, at two different sales levels). Revenue Budget Units Selling price Total revenues 220,000 $ 2,200 $ 484,000,000 195,000 2,200 429,000,000 (a) Blue rugs (b) Blue rugs Requirement 5. Calculate the budgeted cost of goods sold for blue rugs under each sales assumption. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) Begin by (a) completing the cost of goods sold budget assuming sales of 220.000 rugs, and then (b) complete a cost of goods sold budget assuming sales of 195,000 rugs. Cost of Goods Sold Budget (a) 220,000 units Requirement 5. Calculate the budgeted cost of goods sold for blue rugs under each sales assumption. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) Begin by (a) completing the cost of goods sold budget assuming sales of 220,000 rugs, and then (b) complete a cost of goods sold budget assuming sales of 195,000 rugs. Cost of Goods Sold Budget (a) 220,000 units Beginning finished goods inventory Direct materials used Direct manufacturing labor Manufacturing overhead Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory Cost of goods sold Enter any number in the edit fields and then click Check Answer. Xavier Manufacturing Company manufactures blue rugs, using wool and dye as (Click the icon to view the additional information.) direct materials. One rug is budgeted to use 40 skeins of wool at a cost of $4 per skein and 0.75 gallons of dye at a cost of $8 per gallon. All other materials are There is no direct manufacturing labor cost for dyeing. Xavier budgets 55 direct indirect. At the beginning of the year Xavier has an inventory of 462,000 skeins of manufacturing labor-hours to weave a rug at a budgeted rate of $15 per hour. It wool at a cost of $1,062,600 and 4,200 gallons of dye at a cost of $25,200. Target budgets 0.25 machine-hours to dye each skein in the dyeing process. ending inventory of wool and dye is zero Xavier uses the FIFO inventory cost flow e Click the icon to view the budgeted overhead costs.) Read the requirements, 31,460,000 12,100,000 2.60 method dotormining the formula thon loul antod dan undu to #barntant