Use below information for Questions 1 to 4: Arsoy Inc., operates at capacity and makes plastic combs and hairbrushes. Although the combs and brushes are a matching set, they are sold individually and so the sales mix is not 1:1. Yesari Asm Bey, the CFO of Arsoy Inc., is planning the company's annual budget for fiscal year 2018. Arsoy Inc. accounts for direct materials and ending finished goods using a FIFO cost flow assumption. Here is information for 2018: Input Prices Direct Materials Plastic Bristes Direct Labor $0.32 per ounce $0.76 per bunch $13 per hour Combs Brushes 5.2 ounces Input Consumption Direct Materials Plastic Bristes Direct Labor Machine Hours (MH) 8.6 ounces 13 bunches 0.26 hour 0.13 MH 0.052 hour 0.023 MH Inventory Plastic Bristles Beginning Inventory 1,620 ounces 1,860 bunches Target Ending Inventory 1,763 ounces 2,232 bunches Cost of Beginning Inventory $0.36 per ounce $0.73 per bunch Sales and Inventory Expected Sales in units Selling Price Target Ending Inventory in units Beginning Inventory in units Beginning Inventory in dollars Combs Brushes 12,200 14,600 $9 $33 1,300 1,420 602 1,260 $2,730 $27,380 Combs are manufactured in batches of 200, and brushes are manufactured in batches of 100. It takes 22 minutes to set up for a batch of combs and 62 minutes to set up for a batch of brushes. Arsoy Inc. uses activity-based costing and has classified all overhead costs as shown in the following table. Budgeted fixed overhead costs vary with capacity. Arsoy Inc. operates at capacity so budgeted fixed overhead cost per unit equals the budgeted fixed overhead costs divided by the budgeted quantities of the cost allocation base. Delivery trucks transport units sold in sizes of 1,000 for both combs and brushes. Manufacturing Cost Type Budgeted Variable Budgeted Fixed Materials handling $12,235 $22,600 Setup $10,345 $16,650 Processing $11,640 $33,000 Inspection $10,200 $1,560 Cost Driver Allocation Base Numbers of ounces of plastic used Setup hours Machine hours Number of units produced Budgeted Fixed Non-Manufacturing Cost Type Marketing Distribution Budgeted Variable $0.13 per each $1 of sales revenue $113 per each delivery Cost Driver/Allocation Base Sales revenue Number of deliveries Q-1) Calculate budgeted dollar cost of DM purchased Q-2) Calculate budgeted dollar cost of ending inventory. Q-3) Calculate budgeted cost of goods sold. Q-4) Calculate budgeted operating income. Note that not only the DM to be purchased to be used in this period. 2 Note that not only the finished goods inventory. Use below information for Questions 1 to 4: Arsoy Inc., operates at capacity and makes plastic combs and hairbrushes. Although the combs and brushes are a matching set, they are sold individually and so the sales mix is not 1:1. Yesari Asm Bey, the CFO of Arsoy Inc., is planning the company's annual budget for fiscal year 2018. Arsoy Inc. accounts for direct materials and ending finished goods using a FIFO cost flow assumption. Here is information for 2018: Input Prices Direct Materials Plastic Bristes Direct Labor $0.32 per ounce $0.76 per bunch $13 per hour Combs Brushes 5.2 ounces Input Consumption Direct Materials Plastic Bristes Direct Labor Machine Hours (MH) 8.6 ounces 13 bunches 0.26 hour 0.13 MH 0.052 hour 0.023 MH Inventory Plastic Bristles Beginning Inventory 1,620 ounces 1,860 bunches Target Ending Inventory 1,763 ounces 2,232 bunches Cost of Beginning Inventory $0.36 per ounce $0.73 per bunch Sales and Inventory Expected Sales in units Selling Price Target Ending Inventory in units Beginning Inventory in units Beginning Inventory in dollars Combs Brushes 12,200 14,600 $9 $33 1,300 1,420 602 1,260 $2,730 $27,380 Combs are manufactured in batches of 200, and brushes are manufactured in batches of 100. It takes 22 minutes to set up for a batch of combs and 62 minutes to set up for a batch of brushes. Arsoy Inc. uses activity-based costing and has classified all overhead costs as shown in the following table. Budgeted fixed overhead costs vary with capacity. Arsoy Inc. operates at capacity so budgeted fixed overhead cost per unit equals the budgeted fixed overhead costs divided by the budgeted quantities of the cost allocation base. Delivery trucks transport units sold in sizes of 1,000 for both combs and brushes. Manufacturing Cost Type Budgeted Variable Budgeted Fixed Materials handling $12,235 $22,600 Setup $10,345 $16,650 Processing $11,640 $33,000 Inspection $10,200 $1,560 Cost Driver Allocation Base Numbers of ounces of plastic used Setup hours Machine hours Number of units produced Budgeted Fixed Non-Manufacturing Cost Type Marketing Distribution Budgeted Variable $0.13 per each $1 of sales revenue $113 per each delivery Cost Driver/Allocation Base Sales revenue Number of deliveries Q-1) Calculate budgeted dollar cost of DM purchased Q-2) Calculate budgeted dollar cost of ending inventory. Q-3) Calculate budgeted cost of goods sold. Q-4) Calculate budgeted operating income. Note that not only the DM to be purchased to be used in this period. 2 Note that not only the finished goods inventory