Kelvin, Inc. manufactures model airplane kits and projects production at 450, 620, 150, and 650 kits for the next four quarters. (Click the icon to view the manufacturing information.) Prepare Kelvin'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 Kelvin's direct materials budget. Kelvin, Inc. Direct Materials Budget For the Year Ended December 31 First Quarter Second Third Fourth Quarter Quarter Quarter Total Budgeted kits to be produced 450 620 150 650 1870 6 Direct materials (ounces) per kit 6 6 6 6 Direct materials needed for production Plus: 2700 3720 900 3900 11220 Desired direct materials in ending inventory 744 180 780 250 250 Total direct materials needed 910 910 Less: Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per ounce Budgeted cost of direct materials purchases More info - Direct materials are six 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 910 ounces, and the company desires to end each quarter with 20% of the materials needed for the next quarter's production. Kelvin desires a balance of 250 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 $45 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.60 per kit, and fixed overhead is $150 per quarter. Print Done