. 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: Input Prices Direct materials Plastic Metal Direct manufacturing labor $5 per pound $4 per pound $10 per direct manufacturing labor-hour Input Quantities per Unit of Output Cat-allac Dog-eriffic Direct materials Plastic 4 pounds 0.5 pounds 6 pounds 1 pound Metal Direct manufacturing labor-hours Machine-hours (MH) 3 hours 5 hours 11 MH 19 MH Inventory Information, Direct Materials Plastic Metal 290 pounds Beginning inventory Target ending inventory 70 pounds 410 pounds 65 pounds $217 Cost of beginning inventory $1,102 Animal Gear accounts for direct materials using a FIFO cost-flow assumption. Sales and Inventory Information, Finished Goods Dog-eriffic Cat-allac Expected sales in units 530 225 $ 310 $ 205 Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars 10 30 10 19 $1,000 $4,650 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: Cost-Driver Information Cat-allac Dog-eriffic Number of units per batch Setup time per batch 25 1.50 hours 1.75 hours Inspection time per batch 0.5 hour 0.7 hour If necessary, round up to calculate number of batches. Nonmanufacturing fixed costs for March equal $32,000, half of which are salaries. Salaries are ex- pected to increase 5% in April. Other nonmanufacturing fixed costs will remain the same. The only variable nonmanufacturing cost is sales commission, equal to 1% of sales revenue.

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Cash budget

A cash budget is an estimate of an organization's cash flow for the future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future. If cash receipts are insufficient to cover future expenses, an organization may plan to obtain funds from other sources. After estimating the sales, purchase, and capital expenditure budgets for the year, management develops a cash budget. These budgets are created to ensure that an organization's cash flow is managed. It is important to note that only cash transactions are recorded when actual cash enters and exits an organization.