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Animal Gear Company Makes Two Pet Carriers The Cat Allac and

Animal Gear Company produces two pet carriers - the Cat-allac and Dog-eriffic. Production and sales data is provided for April. The company uses activity-based costing and budgets direct materials, direct labor, manufacturing overhead, non-manufacturing costs, revenues, unit costs and income for April. Preparing the budget helps management better plan and control costs.

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Amit Pandey
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54 views2 pages

Animal Gear Company Makes Two Pet Carriers The Cat Allac and

Animal Gear Company produces two pet carriers - the Cat-allac and Dog-eriffic. Production and sales data is provided for April. The company uses activity-based costing and budgets direct materials, direct labor, manufacturing overhead, non-manufacturing costs, revenues, unit costs and income for April. Preparing the budget helps management better plan and control costs.

Uploaded by

Amit Pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Solved: Animal Gear Company makes two pet carriers the

Cat allac and


Animal Gear Company makes two pet carriers the Cat allac and

Animal Gear 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:

Animal Gear accounts for direct materials using a FIFO cost flow assumption.

Animal Gear uses a FIFO cost flow assumption for finished goods inventory.
Animal Gear uses an activity-based costing system and classifies overhead into three activity
pools: Setup, Processing, and Inspection. Activity rates for these activities are $ 105 per setup-
hour, $ 10 per machine-hour, and $ 15 per inspection-hour, respectively. Other information
follows:

Nonmanufacturing fixed costs for March equal $ 32,000, half of which are salaries. Salaries are
expected to increase 5% in April. The only variable nonmanufacturing cost is sales commission,
equal to 1% of sales revenue.

Required
Prepare the following for April:
1. Revenues budget
2. Production budget in units
3. Direct material usage budget and direct material purchases budget
4. Direct manufacturing labor cost budget
5. Manufacturing overhead cost budgets for each of the three activities
6. Budgeted unit cost of ending finished goods inventory and ending inventories budget
7. Cost of goods sold budget
8. Nonmanufacturing costs budget
9. Budgeted income statement (ignore income taxes)
10. How does preparing the budget help Animal Gear’s management team better manage
thecompany?

Animal Gear Company makes two pet carriers the Cat allac and

ANSWER
https://solvedquest.com/animal-gear-company-makes-two-pet-carriers-the-cat-allac-and/

Reach out to [email protected] for enquiry.


Reach out to [email protected] for enquiry.
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