Waves Inc. Manufactures and sells surfboards. They only sell one model, the Glide. In the summer of 2020, the accountant gathered the following information to prepare budgets for 2021.

Material and Labour Requirements (standards):

Wood5 feet per board

Fibreglass6 years per board

Direct Labour5 hours per board

Waves CEO expects to sell 1,200 boards during 2021 at an estimated retail price of $540 per board. The current wages rate is $25/hour. Further, he expects the 2021 beginning inventory to be 100 surfboards and would like to have an ending inventory in 2021 to be 200 surfboards. The company uses FIFO for inventory flow assumptions.

Direct Material Inventory

January 1, 2021

Expected Inventory

December 31^st, 2021

Planned Inventory

Wood

2,000 feet

1,500 feet

Fibre Glass

1,000 yards

2,000 years

The beginning inventory of wood was purchased at $34 per foot and fiberglass was purchased at $5.80 per yard.Prices have now risen to $36 per foot of wood and $6 per yard of fiberglass. Variable manufacturing cost is allocated at the rate of $8.40 per direct-manufacturing labour hour.

Fixed manufacturing overhead costs are budgeted at $78,000 for 2021.

Variable marketing costs are allocated at the rate of $300 per sales visit, and the marketing plans calls for 36 sales visits during 2021. Finally, fixed non-manufacturing costs are budgeted at $36,000 for 2021.

The value of the opening inventory of finished goods for January 1^st, 2021 (Ending Inventory December 31^st, 2020) is estimated to be $44,976.

REQUIRED: For the 2021 upcoming year:

1.Prepare the revenue budget (in dollars).

2.Prepare the production budget (in units).

3.Prepare the direct materials usage (units) and purchases budget ($).

4.Prepare direct manufacturing labour budget.

5.Prepare manufacturing overhead budget.

6.What is the budgeted manufacturing overhead rate?

7.What is the budgeted manufacturing overhead cost per output unit?

8.Calculate the cost of a snowboard in finished goods inventory at the end of 2021?

9.Prepare Ending Inventory Budget for 2021.

10.Prepare Cost of Goods Sold budget.

11. Prepare the Budgeted Income Statement for 2021