The Eastern Technology Company manufactures Weather Radios for sale to retailers such as Wal-Mart, Target, etc.

The 2016 quarterly unit sales estimates and projected sales prices per unit areas follows:

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Sales units 9,200 9,300 9,500 9,400

Price per unit $90 $90 $90 $90

Also, note that that projected sales (and projected production) for Quarter 1 of 2017 is 10,000 units.

Product Cost Assumptions

The companys product requires two raw materials, resistors and switches. Cost parameters are as follows:

Number of Components/Unit

Switches @ $4/switch 3

Resistors @ $8/switch 2

Number of minutes required to complete finished unit

Direct labor minutes per unit 30

Machine minutes per unit 12

Hour rates used

Direct labor rate= $10/hour

Manufacturing overhead rates (i.e., the POHRs to use to apply overhead)

Labor-related= $25/hour

Machine-related= $40/hour

Eastern applies manufacturing overhead using two cost drivers: direct-labor hours and machine hours.

Ending Inventories

The desired ending inventories for each of the two direct materials is 10% of the next quarters respective amount of direct materials needed for production. The desired finished goods ending inventory is 5% of the next quarters budgeted sales units. Beginning inventory for direct materials and finished goods are assumed to be zero as of 1/1/2016.

Sales Budget

Production Budget

Direct Materials Purchases Budget

Direct Labor Budget

Manufacturing Overhead Budget