Smart Touch Learning prepared the following budgets: (Click the icon to view the budgets.) Smart Touch Learning has decided to revise its budget to show fourth quarter sales of 700 tablets due to the expectation of increased holiday sales. First quarter sales for the following year are expected to be 700. The company desires to have an ending Finished Goods Inventory each quarter equal to 20% of the next quarter's sales. Read the requirements - X Requirements C. Requirement la. Revise the sales budget. Smart Touch Learning Sales Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter 1. Revise the following budgets: a. Sales budget b. Production budget 2. Describe how the following budgets will be affected (without revising the budgets): a. Direct materials budget b. Direct labor budget c. Manufacturing overhead budget d. Cost of goods sold budget e. Selling and administrative expense budget Fourth Quarter Total Budgeted tablets to be sold Sales price per unit Total sales Smart Touch Learning Sales Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter 500 550 600 $ 500 $ 500 $ 500$ 250,000 $ 275,000 $ 300,000 $ Fourth Quarter Total 650 Budgeted tablets to be sold Sales price per unit 2,300 500 500 $ 325,000 $ 1,150,000 Total sales Fourth Quarter Total Smart Touch Learning Production Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter Budgeted tablets to be sold 500 550 Plus: Desired tablets in ending inventory 110 120 130 Total tablets needed 610 670 730 Less: Tablets in beginning inventory 200 110 120 410 560 610 Budgeted tablets to be produced 600 650 140 2,300 140 790 130 2,440 200 660 2,240 Third Quarter 610 Total Fourth Quarter 660 3 2,240 3 3 Direct materiais puuget For the Year Ended December 31, 2027 First Second Quarter Quarter Budgeted tablets to be produced 410 560 Direct materials (pounds) per tablet 3 3 Direct materials needed for production 1,230 1,680 Plus: Desired direct materials in ending inventory (pounds) 672 732 Total direct materials needed 1,902 2,412 Less: Direct materials in beginning inventory (pounds) 600 672 Budgeted purchases of direct materials 1,302 1,740 Direct materials cost per pound 50 $ 50 $ Budgeted cost of direct materials purchases 65,100 $ 87,000 $ 1,830 792 1,980 852 6,720 852 2,622 732 2,832 792 7,572 600 1,890 50 $ 2,040 50 $ 6,972 50 $ $ 94,500 $ 102,000 $ 348,600 Total Smart Touch Learning Direct Labor Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter Budgeted tablets to be produced 410 560 3 Direct labor hours per unit 3 3 Direct labor hours needed for production 1,230 1,680 1,830 Direct labor cost per hour 25$ 25$ 25$ 30,750||$ 42,000 $ 45,750 $ Budgeted direct labor cost Fourth Quarter 660 3 610 2,240 3 1,980 25$ 6,720 25 $ 49,500 $ 168,000 Manufacturing Overhead Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter Fourth Quarter Total 410 560 20||$ 610 20||$ 660 20||$ 2,240 20 $ 20||$ Budgeted tablets to be produced VOH cost per tablet Budgeted VOH Budgeted FOH Depreciation $ 8,200 $ 11,200 $ 12,200 $ 13,200 $ 44,800 12,000 15,440 12,000 15,440 12,000 15,440 12,000 15,440 48,000 61,760 Utilities, insurance, property taxes Total budgeted FOH 27,440 27,440 27,440 109,760 27,440 39,640$ $ Budgeted manufacturing overhead costs 35,640 $ 38,640||$ 40,640||$ 154,560 35,640 $ 38,640 $ 39,640||$ 40,640$ 154,560 Budgeted manufacturing overhead costs 1,230 1,680 1,830 1,980 Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate 6,720 154,560 23 $ Smart Touch Learning Cost of Goods Sold Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter $ 55,000 88,200 $ 161,700 $ 176,400 $ Fourth Quarter Total Beginning inventory Tablets produced and sold in 2027 Total budgeted cost of goods sold 55,000 617,400 191,100 $ 143,200 $ 161,700$ 176,400 $ 191,100 $ 672,400 Total Smart Touch Learning Selling and Administrative Expense Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter Salaries Expense $ 30,000 $ 30,000$ 30,000 $ Rent Expense 25,000 25,000 25,000 Insurance Expense 2,500 2,500 2,500 Depreciation Expense 1,500 1,500 1,500 Supplies Expense* 2,500 2,750 3,000 $ Total budgeted selling and administrative expense 61,500 $ 61,750||$ 62,000 $ * Supplies expense is 1% of sales revenue. Fourth Quarter 30,000 $ 25,000 2,500 1,500 3,250 120,000 100,000 10,000 6,000 11,500 62,250 $ 247,500 Requirement la. Revise the sales budget. Smart Touch Learning Sales Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter Budgeted tablets to be sold Sales price per unit Fourth Quarter Total Total sales Requirement 1b. Revise the production budget. Smart Touch Learning Production Budget For the Year Ended December 31, 2027 First Second Third Quarter Quarter Quarter Fourth Quarter Total Plus: Total tablets needed Less: Budgeted tablets to be produced Requirement 2. Describe how the following budgets will be affected (without revising the budgets): a. Direct materials budget: Since production will the amount of direct materials required will v; therefore, purchases of materials will be required. b. Direct labor budget: The change in production will the amount of labor required; therefore, direct labor costs will Fixed costs will c. Manufacturing overhead budget: The change in production will the amount of variable manufacturing overhead; therefore, variable manufacturing overhead costs will the change in production takes Smart Touch Learning out of its relevant range. d. Cost of goods sold budget: The change in production will the production cost per unit because the fixed costs will be distributed among units. In other words, the predetermined overhead allocation rate will The change in production will have a effect on production costs because fixed manufacturing overhead costs are a portion of the total production cost. Therefore, total cost of goods sold will due to the increase in units sold. the increase in sales takes Smart Touch Learning out of its relevant range. The variable selling and administrative cost, e. Selling and administrative expense budget: Fixed selling and administrative costs will Supplies, will with the change in sales