Grady, Inc, manufactures model airplane kits and projects production at 650, 500, and 450 kits for the first quarter, second quarter, and third quarter, respectively. Direct materials are 4 ounces of plastic per kit and the plastic costs $1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 850 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Prepare Grady's direct materials budget and direct labor budget for the first quarter and second quarter. Round the direct labor hours needed for production to two decimal places. Round other amounts to the nearest whole number. Grady, Inc. Direct Materials Budget For the First and Second Quarters First Quarter Second Quarter Budgeted kits to be produced Direct materials per kit (ounces) Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed Less: Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per ounce Budgeted purchases of direct materials 10%X Next Quarter's DM needed for production = Desired DM in ending inventory 1" qtr 2nd qtr Grady, Inc. Direct Labor Budget For the First and Second Quarters First Quarter Second Quarter Budgeted kits to be produced Direct labor hours per kit Direct labor hours needed for production Direct labor cost per hour Budgeted direct labor cost