Part 5 of 9- Requirement: determine Factory Overhead Budget

Zordich lnc. has gathered the following budgeting information for next year and has asked you to prepre their master budget. a. . . . Sales for the final quarter of the prior year total 2,900 units. Expected sales (in units) for the : . . . . : current year are: 2,610 (Quarter 1), 1,740 (Quarter 2), 2,320 (Quarter 3), and 2,320 (Quarter 4) Sales for the first quarter of the following year total 3,480 units. The selling price is $620 per unit in the first three quarters of the year, and $650 per unit in the final quarter. b. . Company policy calls for a given quarter's ending finished goods inventory to equal 50% of the next quarters expectd unit sals. The finishd goods invntor at the end of th prior year is 1,305 units, which complies with the policy. The product's manufacturing cost is $199 per unit, including per unit costs of $120 for materials (8 lbs. at $15 per lb.), $54 for direct labor (3 hours $18 direct labor rate per hour), $21 for variable overhead, and $4 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $15,100; factory utilities, $18,900, and other factory overhead of $3,700 c, . Company policy also calls for a given quarter's ending raw materials inventory to equal 60% of next quarter's expected materials needed for production. The prior year-end inventory is 10,440 lbs of materials, which complies with the policy. The company expects to have 16,704 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter d. : : Sales representatives' commissions are 18% of sales and are paid in the quarter of the sales-The sales manager's quarterly salary will be $198,000 in the first three quarters of the year, and $211,000 in the final quarter.: e.Quarterly general and administrative expenses include $84,000 administrative salaries, rent expense of $50,000 per quarter, insurance expense of $40,000 per quarter, straight line depreciation of $40,000 per quarter, and 1% monthly interest on the $400,000 long-term note payable (12% annually) : f. : Income taxes will be assessed at 35%, and are paid in the quarter incurred. : Requirement Prepare the Factory Overhead Budget for Zordich Inc.. The product's manufacturing cost is $199 per unit, including per unit costs of $120 for materials (8 lbs. at $15 per lb.), $54 for direct labor (3 hours $18 direct labor rate per hour), $21 for variable overhead, and $4 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $15,100; factory utilities, $18,900, and other factory overhead of $3,700. Show lessA Zordich Inc. Factory Overhead Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr.Fourth Qtr Total Budgeted variable overhead Budgeted total averhead