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%, 20%, 25%, and 20% respectively. The sales price is expected to be S60 per unit for the first three quarters and S65 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 S0.50, 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 Si. 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. Requirements A. Prepare the sales budget by quarters for 2016. B. Prepare the production budget by quarters for 2016. C. Prepare the direct materials budget by quarters for 2016. D. Prepare the direct Labor budget by quarters for 2016. E. Prepare the Manufacturing Overhead budget by quarters for 2016 E. Prepare a selling and administrative expense budget by quarters for 2016. Al-Nada Company A sales budget for the Year Ending December 31.2016 Ques 2 Expected Unit selling price Total sales Al-Nada Company B. Production budget for the Year Ensting December 31.2016 Qurser 3 2 Year Expected unit les Al Desired ending finished goods unit Total required units Less Beginning finished gods units Required production unit 25% of each guest sales Estimated first quarter 2017 sales units 25% of estimated first quarter 2017 sale units Al-Nada Company C. Direct materials budget for the Year Ending December 31.2016 Quarter 3 Year Umilto pred Direct materials per Total pounds needed for production Adl Desired ending Direct materials pouk) Total mare Les Berinin direct materials (poundi) Directorials plus Cost Total cost of direct materace Estimated first 2017 productores 5.5%OF Estimated fis-quarter pounds needed for product Al-Nada Company D. Direct Labor budget for the Year Ending December 31,2016 Quarters 2 1 Year Unit to be producer Direct Labor hours) per unit Total required direct labor hours direct labor cost Total direct labor cost Al-Nada Company E. Manufacturing Overhead budget for the Year Ending December 31,2016 Quarters 2 Year Variable costs Indirect material (1.50 hour) Indirect labor (2.00 hour) Utilities (S0.50/hour) Maintenance (S0.40/hour). Total variable costs Fixed cost Supervisory salaries Depreciation Taxes and Insurance Maintenance Total fixed cost Total manufacturing overhead Direct labor hours manufacturing overhead rate per direct hour Al-Nada Company F. selling and administrative expense budget for the Year Ending December 31.2016 Quarters 2 1 3 Year Bandaged sales in units Variable expense sales commissions (S2.50 per unit) freight-out (Si per unit) Total variable expenses Fixed expenses Advertising Sales salaries Office salaries Depreciation Taxes and Insurance Total fixed expenses Total selling and administrative expense