Exercise 20-12 Manufacturing: Preparing production budgets (for two periods) LO P1 Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the first quarter will be 40,800 units. The following unit sales of the transmissions are expected during the rest of the year: second quarter, 204.000 units; third quarter, 351,000 units; and fourth quarter, 272,500 units. Company policy calls for the ending finished goods inventory of a quarter to equal 20% of the next quarter's budgeted sales. Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture. ELECTRO COMPANY Production Budget Second and Third Quarters Second Quarter Third Quarter Required units of available production Units to be produced Exercise 20-16 Manufacturing: Direct materials, direct labor, and overhead budgets LO P1 Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a cost of $3 per pound and 0.4 direct labor hours at a rate of $11 per hour. Variable manufacturing overhead is charged at a rate of $4 per direct labor hour . Fixed manufacturing overhead is $4,800 per month. The company's policy is to maintain direct materials inventory equal to 30% of the next month's materials requirement. At the end of February the company had 4,480 pounds of direct materials in inventory. The company's production budget reports the following Production Budget March April May Units to be produced 3,900 5,000 5,200 (1) Prepare direct materials budgets for Morch and April (2) Prepare direct labor budgets for March and April (3) Prepare factory overhead budgets for March and April Required 1 Required 2 Required 3 Prepare direct materials budgets for March and April. April ORNAMENTAL SCULPTURES MFG. Direct Materials Budget For the Months of March and April March Budgeted production (units) Materials requirements per unit (lbs.) Materials needed for production (lbs.) 0 Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (lbs.) Direct material cost per lb. Total budgeted direct materials $ 0 0 0 0 $ 0 Prepare direct labor budgets for March and April. (Round "DL hours required per unit" answers to two decimal plac ORNAMENTAL SCULPTURES MFG. Direct Labor Budget For the Months of March and April March April Budgeted production (units) DL hours required per unit Total direct labor hours needed 0 Direct labor rate per hour Total budgeted direct labor $ 0 $ 0 0 Prepare factory overhead budgets for March and April. ORNAMENTAL SCULPTURES MFG. Factory Overhead Budget For the Months of March and April March April Total direct labor hours needed VOH rate per DL hour Budgeted variable overhead $ 0 $ Budgeted fixed overhead Total budgeted factory overhead $ 0 $ 0 0