Orville Company has developed the following standards relating to the production of their finished units:

Direct Materials, 7 pounds per unit @ $3.00 per pound

Direct Labor, 4 hours per unit @ $20 per labor hour

Variable Overhead, 6 machine hours per unit @ $5 per machine hour

Fixed overhead costs are estimated at $303,000 each quarter.

The expected selling price is $250 per unit.

Selling and administrative costs are expected to be $2 per unit variable and $120,000 fixed each quarter.

The following sales forecast is available for the year 2017: First Quarter 4,000 units; Second Quarter 6,000 units; Third Quarter 8,000 units; and Fourth Quarter 7,000 units. The expected sales in the First Quarter of the year 2018 are 5,000 units. Any beginning inventories for the year meet the same requirements that management has for inventories in the current year.

If management policy is to maintain a finished goods inventory equal to 25% of the next quarter's sales, prepare a production budget by quarters for the year. After you complete the exam, email me your production budget. How many units will be produced in the first quarter?

Using your production budget, how many units will be produced in the second quarter?

What is the budgeted fixed overhead cost for the YEAR?

production budget and direct material purchase budget.