Learning Objective 3 22.23 Preparing an operating budget-sales and production budgets 100 Company manufactures drinking glasses. One unit is a package of eight glasses, which sells for $30. Lugo projects sales for April will be 2,000 packages, with sales increasing by 250 packages per month for May, June, and July. On April 1, Lugo has 325 packages on hand but desires to maintain an ending inventory of 20% of the next month's sales. Prepare a sales budget and a production budget for Lugo for April, May, and June. May pkg, produced 2,300 Learning Objective 3 3rd Qur. OH $255.00 F22-24 Preparing an operating budget direct materials, direct labor, and manufacturing overhead budgets Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600 kits for the next four quarters. Direct materials are 4 ounces of plastic per kit and the plastic costs $1 per ounce. Indirect materials are considered insignifi cant and are not included in the budgeting process. Beginning Raw Materials Inven- tory is 850 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Grady desires a balance of 200 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Manufacturing over head is allocated using direct labor hours as the allocation base. Variable overhead is $0.20 per kit, and fixed overhead is $165 per quarter. Prepare Grady'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 prede- termined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number