Comprehensive operating budget Dulledge Cutlery Company manufactures fine cutlery. Currently, the company is planning its production of 3 types of knives. Following are expected sales for the year and beginning inventory data based on FIFO:

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Sales Sales in Price Units Units in Beginning Inventory Unit Cost 9 in. slicer $8.50 10,000 0 0 7 in. chopper 8.00 15,000 1,500 $5.30 5 in. paring. 5.00 18,000 2,000 3.05 Wood Product Blade Steel Handle 9" slicer 7 oz. 1 7" chopper 6 oz. 1 5" paring 3 oz. Production Requirements Direct Materials Molded Brass Forging @ Direct Labor Assembly Finishing @ Handle Rivets $10/hr. @ $8/hr. $9/hr. 332 3 .08 hr. .1 hr. .2 hr. 3 .06 hr. .1 hr. .2 hr. .03 hr. .08 hr. .1 hr. Material costs: Blade steel Wood handle Molded handle. Brass rivets Manufacturing overhead: $.09 per oz. Variable .38 each Fixed .19 each .02 each $1.97/DLH $29,750 Variable selling expenses are 4 percent of sales; fixed selling expenses are $20,000. Variable administrative expenses are 3 percent of sales; fixed administrative expenses are $15,000. At the end of each month the company wants an ending inventory in units equal to 15 percent of that month's sales in units, and an ending inventory in raw materials equal to 10% of that month's material requirements. Currently the company has the following amounts of materials in stock: