Question

Prepare

GradyGrady​'s direct materials​ budget, direct labor​ budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for​ production, budgeted overhead​ costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number.

Grady​, Inc. manufactures model airplane kits and projects production at 650​, 500​, 450​, and 600 kits for the next four quarters.

First Quarter                                                            Second   Quarter        Third Quarter               Fourth Quarter                   Total

Direct materials (ounces) per kit

Direct materials needed for production

Plus________

Total direct materials needed

Less________

Budgeted purchases of direct materials

Direct materials cost per ounce

Budgeted cost of direct materials purchases

Direct materials are 4 ounces of plastic per kit and the plastic costs ​$1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 850 ​ounces, and the company desires to end each quarter with 10​% of the materials needed for the next​ quarter's production. Grady desires a balance of 200 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.20 per​ kit, and fixed overhead is $165 per quarter.

Answer 1