Rad Co. provides the following sales forecast and production budget for the next four months:

	April	May	June	July
Sales(units)	500	580	530	600
Budgeted Production (units)	442	570	544	540

The company plans for finished goods inventory of 120 units at the end of June. In addition, each finished unit requires 5 pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next months production needs. Beginning raw materials inventory for April was 663 pounds. Each finished unit requires 0.50 hours of direct labor at the rate of $16 per hour. The company budgets variable overhead at the rate of $20 per direct labor hour and budgets fixed overhead of $8,000 per month

1. Prepare a direct labor budget. (Enter your direct labor hour per unit (hrs) in two decimal places.)

2. Prepare a factory overhead budget.

Exercise 20-9 Manufacturing: Direct labor and factory overhead budgets LO P1 Rad Co. provides the following sales forecast and production budget for the next four months: April May June July Sales (units) 500 580 530 600 Budgeted production (units) 442 570 544 540 The company plans for finished goods inventory of 120 units at the end of June. In addition, each finished unit requires 5 pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month's production needs. Beginning raw materials inventory for April was 663 pounds. Each finished unit requires 0.50 hours of direct labor at the rate of $16 per hour. The company budgets variable overhead at the rate of $20 per direct labor hour and budgets fixed overhead of $8.000 per month 1. Prepare a direct labor budget. (Enter your direct labor hour per unit (hrs) n two decimal places.) RAD CO Direct Labor Budget For April, May, and June April May June 442 570 units Budgeted production (units) Total labor hours needed Labor cost 2. Prepare a factory overhead budget. RAD CO Factory overhead Budget For April, May, and June April May June Total labor hours needed Budgeted variable overhead Budgeted fixed overhead Total factory overhead