Homer, Inc. manufactures model airplane kits and projects production at 500, 330, 200, and 300 kits for the next four quarters. i (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. Begin by preparing Homer's direct materials budget. Homer, Inc. Direct Materials Budget For the Year Ended December 31 First Quarter Second Third Fourth Quarter Quarter Quarter Total Budgeted kits to be produced 500 330 200 300 1,330 2 2 2 2 2 Direct materials (ounces) per kit Direct materials needed for production 1,000 660 400 600 2,660 Plus: Desired direct materials in ending inventory 198 120 180 230 230 Total direct materials needed 1,198 780 580 830 2,890 Less: Direct materials in beginning inventory 870 198 120 180 870 Budgeted purchases of direct materials 328 582 460 650 2,020 3 $ 3 3 $ 3 $ 3 Direct materials cost per ounce Budgeted cost of direct materials purchases 984 $ 1,746 $ 1,380 $ 1,950 $ 6,060 More info Direct materials are two ounces of plastic per kit and the plastic costs $3 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 870 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 230 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.75 hours of direct labor at an average cost of $45 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.75 per kit, and fixed overhead is $150 per quarter. Print Done