31. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead; Ethical Issues. Sanders Swimwear, Inc., produces swimsuits. The following information is to be used for the operating budget this coming year. . . . Average sales price for each swimsuit is estimated to be $50. Unit sales for this coming year ending December 31 are expected to be as follows First quarter 3,000 Second quarter 5,000 Third quarter 20,000 Fourth quarter 6,000 Finished goods inventory is maintained at a level equal to 10 percent of the next quarter's sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 400 units. Each unit of product requires 3 yards of direct materials, at a cost of $4 per yard. Management prefers to maintain ending raw materials inventory equal to 20 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 9,500 yards Each unit of product requires 0.5 direct labor hours at a cost of $12 per hour. Variable manufacturing overhead costs are Indirect materials $0.60 per unit Indirect labor Other $3.50 per unit $2.80 per unit Fixed manufacturing overhead costs per quarter are Salaries Other $30,000 $ 5,000 Depreciation $ 9,330 Required: 1. Prepare a sales budget 2. Prepare a production budget 3. Prepare a direct materials purchases budget 4. Prepare a direct labor budget 5. Prepare a manufacturing overhead budget 6. As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters? 7. Assume the sales budget was developed based on input provided by the company's vice president of sales. 8. The vice president is paid a base salary plus a bonus if actual sales exceed budgeted sales. 9. How might this influence the vice president's estimate of quarterly sales? What effect might this have on the company? 10. (7-10 are actually part of 6, but D2L won't let me get rid of the extra numbers)