Nupes is a famous stick-candy maker in Sydney and produces stick-candies in two sizes, i.e., regular and large. The company sells their products on several platforms such as stores, fairs, schools for fundraisers and in bulk on the internet. 2020 summer is approaching, and Nupes is preparing its budget for December. All Nupess stick-candies are hand-made, mostly out of sugar, and attached to sticks. Expected sales are based on past experience.

Other information for December 2020 is as follows:

		Input prices
	Direct materials:
	Sugar	$0.45 per kg
	Sticks	$0.55 each
	Direct manufacturing labour	$9 per direct manufacturing labour hour (DMLH)

Input quantities per unit of output

	Regular	Large
Direct materials:
Sugar	0.25 kg	0.50 kg
Sticks	1	1
Direct manufacturing labour hour (DMLH)	0.22 hour	0.31 hour
Set-up hours per batch	0.11 hour	0.13 hour

Inventory data for direct materials¹

	Sugar	Sticks
Beginning inventory	150 kg	415
Target ending inventory	275 kg	515
Cost of beginning inventory	$65	$107

1. Nupes accounts for direct materials using a FIFO cost flow assumption.

Sales and inventory data for finished goods²

	Regular	Large
Expected sales in units	3,500	2,300
Selling price	$5.5	$6.5
Target ending inventory in units	350	190
Beginning inventory in units	230	160
Beginning inventory in dollars	$510	$480

2. Nupes uses a FIFO cost flow assumption for finished goods inventory.

All the stick-candies are made in batches of 10. Nupes incurs manufacturing overhead cost, and marketing and general administration costs, but customers pay for shipping. Other than manufacturing labour costs, monthly processing costs are very small. Nupes uses activity-based costing (ABC) and has classified all overhead costs for December 2020 as follows:

	Cost type		Denominator activity	Rate
Manufacturing:
Set-up			Set-up hours	$24 per set-up hour
Processing			Direct manufacturing labour hour	$2.1 per DMLH
			(DMLH)
Non-manufacturing:
Marketing & general admin			Sales revenue	12%

Required:

(a) Revenue (or sales) budget		(2 marks)
(b) Production budget in units		(6 marks)

(c) Direct materials usage budget and direct materials purchases budget (10 marks)

(d) Direct manufacturing labour cost budget (6 marks)