Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is derived from the previous exercise for Templeton Corporation.) With regards to direct materials, each unit of product requires 12 square feet of glass at a cost of \($1.50\) per square foot. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter’s materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 65,000 square feet. With regards to direct labor, each unit of product requires two labor hours at cost of \($15\) per hour.

Required

a. Prepare a direct materials purchases budget for Templeton Corporation using a format similar to Exhibit 9.3.

b. Prepare a direct labor budget for Templeton Corporation using a format similar to Exhibit 9.4.

Exhibit 9.3

Exhibit 9.4

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Direct Materials Purchases Budget for Jerry's Ice Cream Jerry's Ice Cream Direct Materials Purchases Budget Year Ending December 31 Units to be produced (Exhibit 9.2) Materials required per unit (pounds) Materials needed in production Add desired ending inventory* Materials needed in inventory Deduct beginning inventory** Direct materials to be purchased (pounds) Cost of materials per pound Cost of materials to be purchased Quarter 1 2 3 4 Year 40,800 49,200 59,200 51,200 200,400 X 2 X 2 X 2 81,600 98,400 118,400 X 2 102,400 X 2 400,800 19,680 23,680 20,480 20,000 20,000 101,280 122,080 138,880 122,400 420,800 (16,320) (19,680) (23,680) (20,480) (16,320). 84,960 102,400 115,200 101,920 404,480 X $1 $84,960 X $1 $102,400 X $1 $115,200 X $1 X $1 $101,920 $404,480 Direct materials cost per unit+ $2.00 *Desired ending inventory = 20% X next quarter production needs; for the first quarter, 19,680 = 0.20 98,400. Fourth quarter desired ending inventory of 20,000 pounds is based on an estimate of materials needed in production first quarter of next year. **Beginning inventory = inventory at end of previous quarter; for example, second quarter beginning inventory = first quarter ending inventory. +$2 direct materials cost per unit = 2 pounds of materials required per unit X $1 per pound.