Construct the direct labor budget Units of production Direct labor hour per unit Labor hours required Direct labor rate Total direct labor cost 1 46,000 0.1 4,600 ? ? Year 2 Quarter 2 3 60,000 100,000 0.1 0.1 ? ? ? ? ? ? 4 50,000 0.1 ? ? 61,600 $ Year 250,000 0.1 ? ? 284,900 $ Year 2 Quarter 1 3 Year N Construct the manufacuring overhead budget Budgeted direct labor hours Manufacturing overhead rate Total manufacturing overhead cost CNla ? 2 ? ? 2 ? ? 2 ? $ 2 11,200 $ 2 51,800 Data 1 50,000 Year 2 Quarter 2 3 70,000 120,000 Budgeted unit sales Year 3 Quarter 1 2 90,000 100,000 4 80,000 Selling price per unit Accounts receivable, beginning balance . Sales collected in the quarter sales are made Sales collected in the quarter after sales are made Desired ending finished goods inventory is Finished goods inventory, beginning Raw materials required to produce one unit Desired ending inventory of raw materials is Raw materials inventory, beginning Raw material costs Raw materials purchases are paid and Accounts payable for raw materials, beginning balance Direct labor hours Direct labor rate Manufacturing overhead rate Variable selling and adminstrative cost . Fixed selling and adminstrative cost $7 per unit $65,000 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase $81,500 0.10 hour per unit $11 per hour $2 per direct labor hour $0.80 per unit $20,000 per quarter