Oliver, Inc. manufactures model airplane kits. Direct materials are 7 ounces of plastic per kit and the plastic costs $3 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Each kit requires 0.50 hours of direct labor at an average cost of $30 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. The company has prepared the following budgets: (Click the icon to view the budgets.) Oliver projects sales of 200, 500, 200, and 800 kits for the next four quarters. Oliver has no kits in beginning inventory. Determine the cost per kit to manufacture the model airplane kits. Prepare a cost of goods sold budget for the year. Round amounts to two decimal places. Determine the cost per kit to manufacture the model airplane kits. (Round your answers to two decimal places, $X.XX.) Total projected manufacturing cost per kit Carlton, Inc. Cost of Goods Sold Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Kits produced and sold Total budgeted cost of goods sold Oliver, Inc. Direct Materials Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 250 530 300 800 1,880 7 7 7 7 7 Direct materials (ounces) per kit Direct materials needed for production 3,710 5,600 13,160 1,750 1,113 2,100 1,680 630 220 220 Plus: Desired direct materials in ending inventory Total direct materials needed 2,863 3,780 13,380 4,340 1,113 5,820 1,680 940 630 940 Less: Direct materials in beginning inventory Budgeted purchases of direct materials 1,923 12,440 3,227 3||$ 3,150 3||$ 4,140 3||$ $ 3||$ 3 Direct materials cost per ounce $ 5,769||$ 9,681 || $ 9,450||$ 12,420||$ 37,320 Budgeted cost of direct materials purchases Oliver, Inc. Direct Labor Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total 250 530 300 800 1,880 Budgeted kits to be produced Direct labor hours per unit Direct labor hours needed for production 0.50 0.50 0.50 0.50 0.50 125.00 265.00 150.00 400.00 940.00 $ 30 || $ 30 || $ 30||$ 30||$ 30 Direct labor cost per hour $ 3,750||$ 7,950||$ 4,500||$ 12,000 $ 28,200 Budgeted direct labor cost Oliver, Inc. Manufacturing Overhead Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 250 530 300 800 1,880 0.90||$ 0.90||$ 0.90 || $ 0.90||$ 0.90 VOH cost per kit Budgeted VOH 225.00 || $ 477.00||$ 270.00 || $ 1,692.00 720.00||$ 155.00 155.00 155.00 155.00 620.00 Budgeted FOH $ 380.00 $ 632.00||$ 425.00||$ 875.00||$ 2,312.00 Budgeted manufacturing overhead costs Direct labor hours 125.00 265.00 150.00 400.00 940.00 Budgeted manufacturing overhead costs 2,312.00 2.46 Predetermined overhead allocation rate
