Kelvin, Inc. manufactures model airplane kits and projects production at $350,620,200,$ and $700$ kits for the next four quarters.

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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

Direct materials $($ounces$)$ per kit

Direct materials needed for production

Total direct materials needed

Budgeted purchases of direct materials

Direct materials cost per ounce

More info

Direct materials are seven ounces of plastic per kit and the plastic costs $$1$ per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is $910$ ounces, and the company desires to end each quarter with $10\%$ of the materials needed for the next quarter's production. Kelvin desires a balance of $220$ ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires $0\mathrm{.}75$ hours of direct labor at an average cost of $$55$ per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $$0\mathrm{.}50$ per kit, and fixed overhead is $$170$ per quarter.