Direct materials are 6 ounces of plastic per kit and the plastic costs $5 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 880 ounces, and the company desires to end each quarter with 30% of the materials needed for the next quarter's production. Homer desires a balance of 260 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.25 hours of direct labor at an average cost of $25 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.90 per kit, and fixed overhead is $135 per quarter Homer, Inc. manufactures model airplane kits and projects production at 550, 450, 250, and 800 kits for the next four quarters. 1(Click the icon to view the manufacturing information.) Prepare Homer's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. Homer, Inc. Direct Materials Budget For the Year Ended December 31 First SecondThird Fourth Quarter Quarter Quarter Quarter Total Direct materials (ounces) per kit Direct materials needed for production Plus: Total direct materials needed Less: Homer, Inc. manufactures model airplane kits and projects production at 550, 450, 250, and 800 kits for the next four quarters. (Click the icon to view the manufacturing information) Prepare Homer's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. Direct materials (ounces) per kit Direct materials needed for production Plus Total direct materials needed Less: Budgeted purchases of direct materials Direct materials cost per ounce Budgeted cost of direct materials purchases Homer, Inc. Direct Labor Budget For the Year Ended December 31 SecondThird Quarter Quarter QuarterQuarter First Fourth Total Direct labor hours needed for production Budgeted direct labor cost Manufacturing Overhead Budget For the Year Ended December 31 First SecondThird QuarterQuarter QuarterQuarter Fourth Total VOH cost per kit Budgeted VOH Budgeted FOH Budgeted manufacturing overhead costs Direct labor hours Budgeted manufacturing overhead costs Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate
