Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,100 units (solar panels) in July and 4,400 units in August.

1. Each unit requires 2 pounds of direct materials, which cost $6 per pound. The companys policy is to maintain direct materials inventory equal to 20% of the next months direct materials requirement. As of June 30, the company has 2,040 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July.

2. Each unit requires 5 hours of direct labor at a rate of $12 per hour. Prepare a direct labor budget for July.

3. Each unit requires 5 hours of direct labor at a rate of $12 per hour. Variable factory overhead is budgeted to be 60% of direct labor cost, and fixed factory overhead is $181,000 per month. Prepare a factory overhead budget for August.