****PLEASE ANSWER 5 & 6 ONLY****

Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead. Sports Bars, Inc., produces energy bars and sells them by the case (1 unit = 1 case). Information to be used for the operating budget this coming year follows:

• Average sales price for each case is estimated to be $25. Unit sales for this coming year, ending December 31, are expected to be as follows:

  First quarter	80,000
  Second quarter	84,000
  Third quarter	88,000
  Fourth quarter	97,000

• Finished goods inventory is maintained at a level equal to 15 percent of the next quarters sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 13,000 units.
• Each unit of product requires 5 pounds of direct materials, at a cost of $3 per pound. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarters materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 43,000 pounds.
• Each unit of product requires 0.10 direct labor hours at a cost of $14 per hour.

• Variable manufacturing overhead costs are

  Indirect materials	$0.20 per unit
  Indirect labor	$0.15 per unit
  Other	$0.10 per unit

• Fixed manufacturing overhead costs per quarter are

  Salaries	$80,000
  Other	$70,000
  Depreciation	$55,625

Required: *****PLEASE ONLY ANSWER 5 & 6*****

1. Prepare a sales budget using the format shown in Figure 9.3.
2. Prepare a production budget using the format shown in Figure 9.4.
3. Prepare a direct materials purchases budget using the format shown in Figure 9.5.
4. Prepare a direct labor budget using the format shown in Figure 9.6.
5. Prepare a manufacturing overhead budget using the format shown in Figure 9.7. Round to the nearest dollar.
6. As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters?