Reference no: EM13341360

This is a group-assignment. Each group needs to have 2 to 3 members in it. Please organise yourselves into groups. Please make sure that names and ID numbers of all members are stated on the cover sheet of your submission.

As this is a group assignment, each member of the group is awarded the same mark. Working in groups has its pros and cons. I am sure that you will hold constructive and energetic group discussions on the issues at hand. In case of any disagreements, you will be able to resolve them in a democratic and rational way. There will be times when you may have to agree to disagree with each other. Invariably different group members bring different skills to a project; it is up to you to make the best of it. I believe one can learn a lot by discussing the issues with one's colleagues.

If you happen to find your group members are "not pulling their weight" or there are problems with any member's commitment, then please try to resolve those issues amongst yourselves. Open and honest communication always helps. If you are unable to resolve these issues, you are most welcome to see me and we will try to sort out the problems together. Do this as soon as possible and certainly before the due date.

Please adapt this to suit your group, particularly the last two paragraphs.

PART 1:

George Ltd manufactures two types of coils used in electric motors. The two types are: C20 and D40. They both require plastic and metal. Information for the two products for the month of April is given in the following tables:

Input prices
Direct materials
Plastic	$4 per kilogram
Metal	$3 per kilogram
Direct manufacturing labour	$10 per direct manufacturing labour hour

Input quantities per unit of output
	C20	D40
Direct materials
Plastic	4 kilograms	6 kilograms
Metal	0.5 kilogram	1 kilogram
Direct manufacturing labour-hours (DMLH)	3 hours	5 hours
Machine-hours (MH)	10 MH	18MH

Inventory information, direct materials
	Plastic	Metal
Beginning inventory	250 kilograms	60 kilograms
Target ending inventory	380 kilograms	55 kilograms
Cost of beginning inventory	$950	$180

The company accounts for direct materials using a FIFO cost flow assumption.

Sales and inventory information, finished goods
	C20	D40
Expected sales in units	500	300
Selling price	$160	$250
Target ending inventory in units	35	15
Beginning inventory in units	15	30
Beginning inventory in dollars	$1500	$5580

The company uses:

• a FIFO cost flow assumption for finished goods inventory.
• an activity-based costing system and classifies overhead into three activity pools: Set-up, Processing and Inspection. Activity rates for these activities are $100 per set-up hour. $5 per machine-hour and $16 per inspection-hour, respectively.

Other information is as follows:

Cost driver information
	C20	D40
Number of units per batch	20	15
Set-up time per batch	1.5 hours	1.75 hours
Inspection time per batch	0.5 hour	0.6 hour

Non-manufacturing fixed costs for March equal $36,000 of which half are salaries. Salaries are expected to increase by 5% in April. The only variable non-manufacturing cost is sales commission equal to 1% of sales revenue.

Required:

Prepare the following for April:

a. Sales budget

b. Production budget in units

c. Direct material usage budget and direct material purchases budget

d. Manufacturing overhead cost budgets for each of the three activities

e. Budgeted income statement (ignore income taxes)