90.2K

Verified Solution

Link Copied!

Comprehensive problem with ABC costing. $($LO $5)$ Pet Transport Company makes two pet carriers, the Cat$-$allac and the Dog$-$eriffic. They are both made of plastic with metal doors, but the Cat$-$allac is smaller. Information for the two products for the month of April is given in the following tables: BackThe table is as follows. Direct Materials Data Direct materials $ $4$ per kilogram Plastic $ $3$ per kilogram Metal $$10$ per direct manufacturing labour hour Back BackThe table is as follows. Parameter Cat allac Dog eriffic Direct materials blank blank Plastic $4$ kilograms $6$ kilograms Metal $0\mathrm{.}5$ kilograms $1$ kilogram Direct manufacturing labour hours, D M L H $3$ hours $5$ hours Machine hours, M H $10$ M H $18$ M H Back BackThe table is as follows. Parameter Plastic Metal Beginning inventory $250$ kilograms $60$ kilograms Target ending inventory $380$ kilograms $55$ kilograms Cost of beginning inventory $$950$ $$180$ Back$221$Pet Transport accounts for direct materials using a FIFO cost flow assumption. BackThe table is as follows. Parameter Cat allac Dog ellic Expected sales $500$ units $300$ units Selling price $ $160$ $ $250$ Target ending inventory $35$ units $15$ units Beginning inventory $15$ units $30$ units Beginning inventory value $ $1,500$ $ $5,580$ BackPet Transport uses a FIFO cost flow assumption for finished goods inventory.Pet Transport uses an activity$-$based costing system and classifies overhead into three activity pools: Setup, Processing, and Inspection. Activity rates for these activities are $$100$ per setup$-$hour, $$5$ per machine$-$hour, and $$16$ per inspection$-$hour. Other information follows: BackThe table is as follows. Parameter Cat allac Dog eriffic Number of units per batch $2015$ Setup time per batch $1\mathrm{.}5$ hours $1\mathrm{.}75$ hours Inspection time per batch $0\mathrm{.}5$ hour $0\mathrm{.}6$ hour BackNonproduction fixed costs for March equal $$36,000,$ of which half are salaries. Salaries are expected to increase by $5\%$ in April. The only variable nonproduction cost is sales commission, equal to $1\%$ of sales revenue.RequiredPrepare the following for April: Revenue budgetProduction budget in unitsDirect material usage budget and direct material purchases budgetDirect manufacturing labour cost budgetManufacturing overhead cost budgets for each of the three activitiesBudgeted unit cost of ending finished goods inventory and ending inventories budgetCost of goods sold budgetNon$-$manufacturing costs budgetBudgeted income statement $($ignore income taxes$)$ Check Figure: $2.$ Production units: Cat$-$allac, $520$ Dog$-$eriffic, $285$

Answer & Explanation Solved by verified expert

See Answer