Kelvin, Inc. manufactures model airplane kits. Direct materials are four ounces of plastic per kit and the plastic costs $2 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Each kit requires 0.25 hours of direct labor at an average cost of $50 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. The company has prepared the following budgets: (Click the icon to view the budgets.) Kelvin projects sales of 400, 500, 600, and 100 kits for the next four quarters, Kelvin has no kits in beginning inventory. Determine the cost per kit to manufacture the model airplane kits. Prepare a cost of goods sold budget for the year. Round amounts to two decimal places. Determine the cost per kit to manufacture the model airplane kits. (Round your answers to two decimal places, $X.XX.) 8 Direct materials cost per kit Direct labor cost per kit Manufacturing overhead cost per kit 12.5 Total projected manufacturing cost per kit Kelvin, Inc. Direct Materials Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 500 620 250 700 2,070 Direct materials (ounces) per kit 4 Direct materials needed for production 2,000 2,480 1,000 2,800 8,280 Plus: Desired direct 496 200 560 materials in ending inventory 260 260 Total direct materials needed 2,496 2,680 1,560 3,060 8,540 Less: Direct materials in 930 496 200 560 930 beginning inventory Budgeted purchases of direct materials 1,566 2,184 1,360 2,500 7,610 Direct materials cost per 2|$ 2 $ 2 $ 2 $ 2 ounce Budgeted cost of direct $ 3,132 $ 4,368 $ 2,720 $ 5,000 $ 15,220 materials purchases Kelvin, Inc. Direct Labor Budget For the Year Ended December 31 $ Firet Sarand Third Fourth Thaterais purchases Kelvin, Inc. Direct Labor Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total 500 620 250 700 2,070 0.25 0.25 0.25 0.25 0.25 Budgeted kits to be produced Direct labor hours per unit Direct labor hours needed for production Direct labor cost per hour Budgeted direct labor cost 125.00 155.00 62.50 175.00 517.50 $ 50 $ 50 $ 50 $ 50 $ 50 $ $ 6,250 $ 7,750 $ 3,125$ 8,750 $ 25,875 Kelvin, Inc. Manufacturing Overhead Budget For the Year Ended December 31 First Second Third Quarter Quarter Quarter Fourth Quarter Total 125.00 155.00 62.50 175.00 517.50 needed for production Direct labor cost per hour Budgeted direct labor cost $ $ 50 $ 50 $ 50 $ 50 $ 50 $ 6,250 $ 7,750 $ 3,125 $ 8,750 $ 25,875 Kelvin, Inc. Manufacturing Overhead Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 500 0.40 $ 620 0.40||$ 250 0.40 $ 700 0.40 $ 2,070 0.40 $ VOH cost per kit Budgeted VOH $ 200.00 $ 248.00 $ 100.00 $ 280.00 $ 160.00 160.00 160.00 160.00 828.00 640.00 Budgeted FOH Budgeted manufacturing overhead costs $ 360.00 $ 408.00 $ 260.00 $ 440.00 $ 1,468.00 125.00 155.00 62.50 175.00 517.50 $ 1,468.00 Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate $ 2.84
