Regular
Deluxe
Follete Inc.
Revenues Budget
For the Year Ending December 31st , 2011
Units
Selling Price
($)
2,000
80.00
3,000
130.00
Total Revenues
($)
160,000
390,000
550,000
2)
Follete Inc.
Production Budget
For the Year Ending December 31st , 2011
Regular
Budgeted Unit Sales
2,000
Add: Target ending inventory
400
2,400
Less: Beginning finished goods inventory
(250)
Goods to be Manufactured
2,150
Deluxe
3,000
600
3,600
(650)
2,950
Combs manufactured in batches of 200, therefore divide the number of batches, then
multiply setups by one third (1/3). {20 / 60 = 1/3}
Brushes manufactured in batches of 100, therefore divide the number of batches, then
multiply setups by one (1).
Units to be produced
Combs
12,600
Brushes
14,200
/ 200
/ 100
63
142
*1/3
*1
21
142
Total:
Budgeted Processing
= Variable Processing + Fixed Processing
= $7,760 + $20,000
= $27,760
Allocation Rate
= Budgeted Processing / Total Machine hours
=$27,760 / 1,735 MH
= $16 per machine hour
(c) Budgeted Inspection
= Variable Inspection + Fixed Inspection
= $7,000 + $1,040
= $8,040
Allocation Rate
= Budgeted Inspection / Units to be produced
= $8,040 / 26,800
4)
Follete Inc.
Direct Materials Usage Budget
For the Year Ending December 31st , 2011
Plastic
Bristles
Physical Units Budget: Units
Combs (12,600 * 5)
63,000 oz.
Brushes (14,200 * 8)
113,600 oz.
{14,200*16}
227,200
Total Direct Materials in units
176,600 oz.
227,200
Cost Budget for direct
materials
Direct materials to be used
176,600
227,200
Less: Beginning inventory
(1,600)
(1,820)
*Input prices
*$0.20
*$0.50
$35,000
$112,690
304
946
$35,304
$113,636
Follete Inc.
Direct Materials Purchases Budget
For the Year Ending December 31st , 2011
Plastic
Bristles
Physical units to be used in production
176,600
227,200
Add: Target Ending Direct Material
1,766
2,272
Inventory
178,366
229,472
Less: Beginning Inventory
(1,600)
(1,820)
Purchases in units
176,766
227,652
Cost of Purchases
*Input prices
*$0.20
*$0.50
Total
$148,940
Total
$35,353
Total purchases in dollars
$113,826
$149,179
6)
Follete Inc.
Direct Manufacturing Labour Cost Budget
For the Year Ending December 31st, 2011
Combs
Brushes
Units to be produced
Direct Labour hours per unit
Total Direct Labour hours
required
Cost per hour ($)
Total Direct Labour cost
12,600
*0.05
14,200
*0.2
630
2840
*12
$7,560
*12
$34,080
Total
($)
$41,640
7)
Materials Handling
Setups
Follete Inc.
Manufacturing Overhead Cost Budget
For the Year Ending December 31st, 2011
Budgeted Variable
Budgeted Fixed
Cost ($)
Cost ($)
11,490
14,200
6,830
11,100
Total
($)
26,490
17,930
Processing
7,760
20,000
27,760
Total
26,080
46,100
72,180
8)
Total
($)
0.20
0.50
12
5 oz.
.05 hrs.
0.60
0.15
110
16
0.30
5 oz.
0.00167 hrs.
.025 MH
1 unit
0.75
0.18
0.40
0.30
3.23
Total
($)
1.60
8.00
2.40
1.20
1.10
1.60
Inspection
0.30
1 unit
0.30
16.20
Follete Inc.
Ending Inventories Budget
For the Year Ending December 31, 2011
Quantity
Cost per unit
($)
Direct Materials:
Plastic
Bristles
Finished goods:
Combs
Brushes
Total ending inventory
Total
($)
1,766
2,272
0.20
0.50
353.20
1,136.00
1,489.20
1,200
1,400
3.23*
16.20*
3,876.00
22,680.00
26,556.00
$28,045.20
*Cost per Unit of Combs and Brushes ($3.23, $16.20) include Direct Material, Direct Labour cost and
Manufacturing Overhead cost. Cost values are broken down in the Unit Costs of Ending Finished Goods
Inventory.