Manufacturing overhead expenses budget-

Kiwi Shirts produces a one-size-fits-all shirt. The CFO, Alex Nevin, has asked you to prepare the operating budgets for 2022. You are provided with the following information in relation to the company's activities:

1. The budgets are for the 2022 year and are broken into four quarters. The target sales for 2022 by each respective quarter of the year (Q) are:

• Q1: 25 000 shirts
• Q2: 27 000 shirts
• Q3: 30 000 shirts
• Q4: 30 000 shirts.

1. The selling price for each shirt is $130 and will be kept constant throughout the year.

1. The beginning inventory of shirts at the start of quarter 1 is 2500, which cost $260 000 to produce in the previous year, and the inventory manager wants to increase inventory to 5000 shirts at the end of each quarter.

1. Each shirt requires 1.25 metres of material.

1. The opening material inventory is 625 metres at $40 per metre, and the manager wants materials inventory at the end of each quarter to increase to 1250 metres at $40 per metre. The material cost is not expected to change for the next year.

1. Labour hours for each shirt are expected to be 2.5 hours, while wages are $20 per hour and are not expected to increase during the period.

1. Based on last year's information and reasonable forecasts, Kiwi Shirts has determined the following manufacturing overhead costs:

• indirect materials (cotton, labels) per shirt: $2.50
• electricity per shirt: $2.00
• maintenance on machinery per shirt: $0.50
• supervisor's salary per quarter: $60 000
• factory rent per quarter: $65 000
• rates and insurance per quarter: $20 000.