Hazlett, Inc., operates at capacity and makes plastic combs and hairbrushes. Although the combs and brushes are a matching set, they are sold individually and so the sales mix is not 1:1. Hazlett's management is planning its annual budget for fiscal year 2018. Here is information for 2018: Input Prices Direct materials $0.30 per ounce $0.75 per bunch $ 18 per direct manufacturing labor-hour Plastic Bristles Direct manufacturing labor Input Quantities per Unit of Output Combs Brushes Direct materials Plastic 5 ounces 8 ounces 16 bunches Bristles Direct manufacturing labor Machine-hours (MH) 0.05 hours 0.2 hours 0.025 MH 0.1 MH Inventory Information, Direct Materials Plastic Bristles Beginning inventory Target ending inventory Cost of beginning inventory 1,820 bunches 1,600 ounces 1,766 ounces $456 2,272 bunches $1,419 Hazlett accounts for direct materials using a FIFO cost flow. Sales and Inventory Information, Finished Goods Combs Brushes Expected sales in units 12,000 14,000 24 Selling price 30 Target ending inventory in units Beginning inventory in units Beginning inventory in dollars 1,200 1,400 600 1,200 $ 2,700 $27,180 Hazlett uses a FIFO cost-flow assumption for finished-goods inventory. Combs are manufactured in batches of 200, and brushes are manufactured in batches of 100. It takes 20 minutes to set up for a batch of combs and 1 hour to set up for a batch of brushes. Hazlett uses activity-based costing and has classified all overhead costs as shown in the following table. Budgeted fixed overhead costs vary with capacity. Hazlett operates at capacity so budgeted fixed overhead cost per unit equals the budgeted fixed overhead costs divided by the budgeted quantities of the cost allocation base. Budgeted Variable Cost Type Manufacturing Budgeted Fixed Cost Driver/Allocation Base Materials handling Setup $17,235 $22,500 16,650 Number of ounces of plastic used 10,245 Setup-hours 30,000 Processing 11,640 Machine-hours 10,500 Inspection Nonmanufacturing 1,560 Number of units produced Marketing $21,150 $90,000 Sales revenue 1,170 Distribution Number of deliveries Delivery trucks transport units sold in delivery sizes of 1,000 combs or 1,000 brushes.