III Homework: Ch7-HW Question The Gavin Tire Company manufactures racing tires for bicycles. Gavin sells tires for $85 each. Gavin is plann the next year by developing a master budget by quarters. Gavin's balance sheet for December 31, 2024, follo (Click the icon to view the balance sheet.) Gavin fire Company Sales Budget For the Year Ended December 31, 2025 More info (Unless otherwise noted, assume all of the following events occurred during 2024 and that any balances given are stated as of December 31, 2024.) a. Budgeted sales are 1,100 tires for the first quarter and expected to increase by 100 tires per quarter. Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account. b. Finished Goods Inventory on December 31, 2024 consists of 700 tires at $36 each. c. Desired ending Finished Goods Inventory is 20% of the next quarter's sales; first quarter sales for 2026 are expected be 1,500 tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2024, consists of 1,400 pounds of rubber compound used to manufacture the tires. e. Direct materials requirements are two pounds of a rubber compound per tire. The cost of the compound is $7.50 per pound. f. Desired ending Raw Materials Inventory is 50% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2025 is 1,400 pounds; indirect materials are insignificant and not considered for budgeting purposes. Each tire requires 0.50 hours of direct labor; direct labor costs average $8 per hour. h. Variable manufacturing overhead is $2 per tire. First Quarter Second Quarter Third Quarter Fourth Quarter g. Total Budgeted tires to be sold Sales price per unit Total sales Help me solve this Demodors example Get more help Print Done Clear all Check answer