Oliver,Inc. manufactures model airplane kits and projects production at 300,530,550,and 700kits per quarter. Direct materials are $ 6per kit. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is $400,and the company desires to end each quarter with 30%of the materials needed for the next quarter's production. Oliver desires a balance of $400in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.25hours of direct labor at an average cost of $55per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.20per kit and fixed overhead is $155per quarter. Prepare Oliver'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.

Begin by preparing Oliver'sdirect materials budget.

	Save Accounting Table...	+
	Copy to Clipboard...	+

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	300	530	550	700	2080
Direct materials cost per unit	1800	3180	3300	4200	12480
Direct materials needed for production
Plus:
Total direct materials needed
Less:
Budgeted purchases of direct materials

Begin by preparing OliverOliver's direct materials budget. 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 300 530 550 700 2080 Direct materials cost per unit 1800 3180 3300 4200 12480 Direct materials needed for production Plus: Total direct materials needed Less: Budgeted purchases of direct materials