Xu Manufacturing Company manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 38 skeins of wool at a cost of $4 per skein and 0.7 gallons of dye at a cost of $7 per gallon. All other materials are Indirect. At the beginning of the year Xu has an inventory of 450.000 skins of wool at a cost of $855,000 and 3.700 gallons of dye at a cost of $21,830. Target ending inventory of wool and dye is zero. Xu uses the FIFO inventory cost flow method A (Click the icon to view the additional information) There is no direct manufacturing labor cost for dyeing Xu budgets 52 direct manufacturing labor-hours to weave a rug at a budgeted rate of $14 per hour. It budgets 0.3 machine-hours to dye each skein in the dyeing process (Click the icon to view the budgeted overhead costs) Read the requirements skens 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 8.550.000 157.500 Blue rugs Cost Budget Available from beginning direct materials inventory under a FIFO cost-flow assumption) Wool 855,000 $ 21,830 Dye To be purchased this period Wool 32.400,000 1 076 600 Dye $ 33255,000 $ 1098.430 334353430 Direct materials to be used this period Data Table The following table presents the budgeted overhead costs for the dyeing and weaving cost pools: Dyeing (based on 2,565,000 MH) Weaving (based on 11,700,000 DMLH) Variable costs Indirect materials Maintenance 0 $ 6,560,000 7,565.000 15.420,000 5.525,000 2 810,000 Utilities Fixed costs Indirect labor Depreciation Other 362,000 2,227,000 728,000 17,442,000 $ 1,730,000 270,000 5,835,000 31,590,000 Total budgeted costs Print Done Laul skem in the dyeir (Click the icon to view the budgeted overhead costs.) Read the requirements. rect material usage budget in both units and dollars. por 0 Requirements ire Prepare a direct material usage budget in both units and dollars. Calculate the budgeted overhead allocation rates for weaving and dyeing. Calculate the budgeted unit cost of a blue rug for the year. Prepare a revenues budget for blue rugs for the year, assuming Xu sells (a) 225,000 or (b) 210,000 blue rugs (that is, at two different sales levels). Calculate the budgeted cost of goods sold for blue rugs under each sales assumption. Find the budgeted gross margin for blue rugs under each sales assumption What actions might you take as a manager to improve profitability if sales drop to 210,000 blue rugs? How might top management at Xu use the budget developed in requirements 1-6 to better manage the company? Print Done