Preston, Inc. manufactures model airplane kits. Direct materials are 3 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. Each kit requires 0.25 hours of direct labor at an average cost of $30 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. The company has prepared the following budgets: (Click the icon to view the budgets.) Preston projects sales of 350, 100, 450, and 400 kits for the next four quarters. Preston has no kits in beginning inventory. Determine the cost per kit to manufacture the model airplane kits. Prepare a cost of goods sold budget for the year. Round amounts to two decimal places. Determine the cost per kit to manufacture the model airplane kits. (Round your answers to two decimal places, $X.XX.) Total projected manufacturing cost per kit Preston, Inc. Direct Materials Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 550 220 350 150 3 1,270 3 3 3 3 Direct materials (ounces) per kit Direct materials needed for production 1,650 132 660 90 450 210 1,050 240 3,810 240 Plus: Desired direct materials in ending inventory Total direct materials needed 750 660 1,782 860 1,290 210 4,050 860 132 90 Less: Direct materials in beginning inventory Budgeted purchases of direct materials 618 1,080 922 3||$ 570 3||$ 3,190 3 $ 3||$ 3||$ Direct materials cost per ounce $ 2,766 $ 1,854||$ 1,710 $ 3,240 $ 9,570 Budgeted cost of direct materials purchases Preston, Inc. Direct Labor Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total 220 150 550 0.25 350 0.25 Budgeted kits to be produced Direct labor hours per unit Direct labor hours needed for production 1,270 0.25 0.25 0.25 137.50 30||$ 55.00 30||$ 37.50 30 || $ 87.50 30||$ 317.50 30 $ Direct labor cost per hour $ 4,125$ 1,650 $ 1,125$ 2,625 $ 9,525 Budgeted direct labor cost Preston, Inc. Manufacturing Overhead Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total 220 150 350 550 0.80 || $ 1,270 0.80 $ 0.80||$ 0.80 || $ 0.80 || $ Budgeted kits to be produced VOH cost per kit Budgeted VOH $ 440.00 || $ 145.00 176.00 || $ 145.00 120.00 || $ 145.00 280.00 || $ 145.00 1,016.00 580.00 Budgeted FOH $ 585.00 || $ 321.00 || $ 265.00 || $ 425.00 || $ 1,596.00 Budgeted manufacturing overhead costs Direct labor hours 137.50 55.00 37.50 87.50 317.50 Budgeted manufacturing overhead costs $ $ 1,596.00 5.03 Predetermined overhead allocation rate
