More info Direct materials are two ounces of plastic per kit and the plastic costs $5 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 870 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Preston desires a balance of 300 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.50 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 $0.25 per kit, and fixed overhead is $160 per quarter. Preston, Inc. manufactures model airplane kits and projects production at 400,360,500, and 750 kits for the next four quarters. 'Click the icon to view the manufacturing information.) Prepare Preston'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 Preston's direct materials budget. Carlton, Inc. Direct Labor Budget For the Year Ended December 31 Budgeted direct labor cost VOH cost per kit Budgeted VOH Budgeted FOH Budgeted manufacturing overhead costs Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate