Tyva makes a very popular undyed cloth sandal in one style, but in Regular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth-covered wooden soles. Tyva is preparing its budget for June 2015 and has estimated sales based on past experience.

Other information for the month of June follows:

Tyva accounts for direct materials using a FIFO cost flow assumption.

Tyva uses a FIFO cost flow assumption for finished goods inventory. All the sandals are made in batches of 50 pairs of sandals. Tyva incurs manufacturing overhead costs, marketing and general administration, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Tyva ships 40 pairs of sandals per shipment. Tyva uses activity-based costing and has classified all overhead costs for the month of June as shown in the following chart:

Required
1. Prepare each of the following for June: a. Revenues budget b. Production budget in units c. Direct material usage budget and direct material purchases budget in both units and dollars; round to dollars d. Direct manufacturing labor cost budget e. Manufacturing overhead cost budgets for setup, processing, and inspection activities f. Budgeted unit cost of ending finished goods inventory and ending inventories budget g. Cost of goods sold budget h. Marketing and general administration and shipping costs budget 2. Tyva’s balance sheet for May 31 follows.

Use the balance sheet and the following information to prepare a cash budget for Tyva for June. Round to dollars.
All sales are on account; 60% are collected in the month of the sale, 38% are collected the following month, and 2% are never collected and written off as bad debts.
All purchases of materials are on account. Tyva pays for 80% of purchases in the month of purchase and 20% in the following month.
All other costs are paid in the month incurred, including the declaration and payment of a $ 15,000 cash dividend in June.
Tyva is making monthly interest payments of 0.5% ( 6% per year) on a $ 150,000 long-term loan.
Tyva plans to pay the $ 10,800 of taxes owed as of May 31 in the month of June. Income tax expense for June is zero.
30% of processing, setup, and inspection costs and 10% of marketing and general administration and shipping costs are depreciation.
3. Prepare a budgeted income statement for June and a budgeted balance sheet for Tyva as of June 30,2015.

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Input Prices Direct materials Cloth Wood $5.25 per yand $7.50 per board foot S15 per direct manufacturing labor-hour Direct manufacturing labor Input Quantities per Unit of Output (per pair of sandals Regular Deluxe Direct materials 13 yards 1.5 yards 2b.f. 7 hours 3 hours Cloth Wood Direct manufacturing labor-hours (DMLH) Setup-hours per batch 5 hours 2 hours Inventory Information, Direct Materials Beginning inventory Target ending inventory Cost of beginning inventory Cloth 610 yards 386 yards $3,219 Wood 800 b.f 295 b.f. $6,060 Sales and Inventory Information, Finished Goods Expected sales in units (pairs of sandals) Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars Regular Deluxe 3,000 120 195 600 650 $23,250 $92,625 2,000 400 250 Cost type Manufacturing Denominator Activity Rate Setup Processing Inspection Setup-hours Direct manufacturing labor-hours Number of pairs of sandals $18 per setup-hour $1.80 per DMLH $1.35 per pair Nonmanufacturing Marketing and general administration Shipping Sales revenue Number of shipments 8% $15 per shipment Tyva Balance Sheet as of May 31 Assets Cash Accounts receivable 9,435 16,200 307,800 9,279 324,000 Less: Allowance for bad debts Inventories Direct materials Finished goods Fxed assets 115,875 $870,000 136,335 Less: Accumulated depreciation Total assets 733,665 $1,176,054 Liabilities and Equity Accounts payable Taxes payable Interest payable Long-term debt Common stock Retained earnings Total liabilities and equity $ 15,600 10,800 750 150,000 300,000 698,904 $1,176,054