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Preston, Inc. manufactures model airplane kits and projects production at 150, 330, 600, and 800 kits for the next four quarters. (Click the icon
Preston, Inc. manufactures model airplane kits and projects production at 150, 330, 600, and 800 kits for the next four quarters. (Click the icon to view the manufacturing information.) Prepare Preston'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. Round other amounts to the nearest whole number. Begin by preparing Preston's direct materials budget. Preston, Inc. Direct Materials Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 150 330 600 800 1,880 Direct materials (ounces) per kit 4 4 4 Direct materials needed for production 600 1,320 2,400 3,200 7,520 Desired direct materials in ending Plus: inventory 396 720 960 210 210 Total direct materials needed 996 2,040 3,360 3,410 7,730 Less: Direct materials in beginning inventory 950 396 720 960 950 Budgeted purchases of direct materials 46 1,644 2,640 2,450 6,780 3 3 3 3 $ 3 Direct materials cost per ounce 138 $ 4,932 $ 7,920 $ 7,350 $ 20,340 Budgeted cost of direct materials purchases Prepare the direct labor budget. (Enter any hours as a decimal to two places, X.XX, and round all other amounts to the nearest whole number.) Preston, Inc. Direct Labor Budget For the Year Ended December 31 Preston, Inc. manufactures model airplane kits and projects production at 150, 330, 600, and 800 kits for the next four quarters. (Click the icon to view the manufacturing information.) Prepare Preston'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. Round other amounts to the nearest whole number. LICGICAL WHUID HUNTINGI./ Budgeted kits to be produced Direct labor hours per unit Direct labor hours needed for production Direct labor cost per hour Preston, Inc. Direct Labor Budget For the Year Ended December 31 First Quarter Second Third Fourth Quarter Quarter Quarter Total 150 330 600 800 1,880 0.50 0.50 0.50 0.50 0.50 75.00 165.00 300.00 400.00 940.00 20 $ 20 $ 20 $ 20 $ 20 69 $ 1,500 $ 3,300 $ 18,800 Budgeted direct labor cost 6,000 $ 8,000 $ Prepare the manufacturing overhead budget. (Enter all costs and hours as a decimal to two places, X.XX. Abbreviations used: VOH = variable manufacturing overhead; FOH = fixed manufacturing overhead.) Preston, Inc. Budgeted kits to be produced VOH cost per kit Budgeted VOH Manufacturing Overhead Budget For the Year Ended December 31 First Second Quarter Quarter Third Quarter Fourth Quarter Total Preston, Inc. manufactures model airplane kits and projects production at 150, 330, 600, and 800 kits for the next four quarters. i (Click the icon to view the manufacturing information.) Prepare Preston'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. Round other amounts to the nearest whole number. Duvelen kits to be produced 350 UUU Ouv 1,000 Direct labor hours per unit 0.50 0.50 0.50 0.50 0.50 Direct labor hours needed for production 75.00 165.00 300.00 400.00 940.00 Direct labor cost per hour 20 $ 20 $ 20 $ 20 20 Budgeted direct labor cost 1,500 $ 3,300 $ 6,000 $ 8,000 $ 18,800 Prepare the manufacturing overhead budget. (Enter all costs and hours as a decimal to two places, X.XX. Abbreviations used: VOH = variable manufacturing overhead; FOH = fixed manufacturing overhead.) Preston, Inc. Budgeted kits to be produced VOH cost per kit Budgeted VOH Budgeted FOH Budgeted manufacturing overhead costs Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate Manufacturing Overhead Budget For the Year Ended December 31 First Quarter Second Quarter Third Quarter Fourth Quarter Total More info Direct materials are four ounces of plastic per kit and the plastic costs $3 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 950 ounces, and the company desires to end each quarter with 30% of the materials needed for the next quarter's production. Preston desires a balance of 210 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.50 hours of direct labor at an average cost of $20 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.80 per kit, and fixed overhead is $145 per quarter. Print Done
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