Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers a aircraft maintenance fadlities. Projected sales in units for the coming 5 months follow January February March 40,000 50,000 60,000 60,000 62,000 May The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing a. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80% of the ne month's sales. b. The data on materials used are as follows: Per-Unit Usage DMUnit Cost (S) Direct Material Metal 10 lbs Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prilor year c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25 d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) Fixed-Cost Variable-Cost Commponent ($) Component ($) 1.00 0.50 0.40 Maintenance 0,000 16,000 Depreciation 12,000 80,000 0.50 e. Monthly seling and administrative expenses are also estimated using a flexible budgeting formula. (Nete: Activity is measured in units sold) Foced Costs (s) Variable Costs ($) Check My 3 mone Check My Work uses remaining All work saved