Al-Nada Company is preparing its master budget for 2016. Relevant data pertaining to its sales, production, and direct materials budgets are as follows: Sales: 1. Sales for the year are expected to total 1,500,000 units. Quarterly sales are 20%, 25%, 25%, and 30% respectively. The sales price is expected to be $60 per unit for the first three quarters and $65 per unit beginning in the fourth quarter. Sales in the first quarter of 2010 are expected to be 10% higher than the budgeted sales for the first quarter of 2011. 2. Production: Management desires to maintain ending finished goods inventories at 25% of next quarter's budgeted sales volume. 3. Direct materials: Each unit requires 4 pounds of raw materials at a cost of S6 per pound. Management desires to maintain raw materials inventories at 5% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2010 are 950,000 pounds. 4. Direct labor hours are determined from the production budget. Al-Kamal Company, two hours of direct labor are required to produce each unit of finished goods. The anticipated hourly wage rate is $15. 5. Al-Kamal Company expects variable costs to fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials $1.50, indirect labor $2.00, utilities $0.50, and maintenance $0.40. Thus, for the 6,500 direct labor hours to produce 3,100 units, budgeted indirect materials are $6,200 (6,500 x $1.50), and budgeted indirect labor is $7,600 (6,500 x $2.00). Al-Kamal also recognizes that some maintenance is fixed. The amounts reported for fixed costs are assumed 6. Variable expense rates per unit of sales are sales commissions $2.50 and freight-out $1. Variable expenses per quarter are based on the unit sales from the sales budget. Al-Kamal expects sales in the first quarter to be 4,000 units. Fixed expenses are based on assumed data. 7. Al-Nada company has the following information Company sold 15,000 units of product. Sales price is $60 per unit. Interest expense is expected to be $100, and Income taxes are estimated to be $12,000