next month's sales. Prepare ril, May, and June Sales buu Le E22-24 Preparing an operating budget- manufacturing overhead budgets direct materials, direct labor, and 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 yeat 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 Note: Exercise E22-24 must be completed before attempting Exercise E22-25 tive 3 E22-25 Preparing an operating budget-cost of goods sold budget fer to the budgets prepared in Exercise 322-24. Determine the cost per kit to manufacture the model airplane kits. Grady projects sales of 100, 150, 100, and 200 kits for the next four quarters. Prepare a cost of goods sold budget for the year. Grady has no kits in beginning $550 inventory. Round amounts to two decimal places. dule of cash receipts, sensitivity