The Tasnees Tre Comgany manulactures racing tres for bicycles. Tasnoem Tire Compeny sells tres for $$$5$ each Tasneem Tre Company is planning for the ned yer by doveloping a master budgel by quarters. Tasneem Tre Companys belance sheet for December $31,2025,$ follows

Yew the balance sheet.

Read the requirements.

Prepare the drect maserials budget.

View the eroduclon budore that Yol prepared above

Other Data

$($Unless otherwise noted, assume all of the following events are budgeted to occur in $2026$ and that any balances given are stated as of December $31,2025.)$

a$.$ Budgeted sales are $800$ tires for the first quarter and expected to increase by $100$ tires per quarter Cash sales are expected to be $30\%$ of total sales, with the remaining $70\%$ of sales on account.

b$.$ Finished Goods Inventory on December $31,2025$ consists of $250$ tires at $$29$ each

c$.$ Desired ending Finished Goods Inventory is $30\%$ of the next quarter's sales, first quarter sales for $2027$ are expected be $1,200$ tires. FIFO inventory costing method is used

d$.$ Raw Materials Inventory on December $31,2025,$ consists of $500$ pounds of rubber compound used to manufacture the tires.

e$.$ Direct materials requirements are two pounds of a rubber compound per tire The cost of the compound is $$8\mathrm{.}00$ per pound.

f$.$ Desired ending Raw Materials Inventory is $20\%$ of the next quarter's direct materials needed for production; desired ending inventory for December $31,2026,$ is $547$ pounds indirect materials are insignificant and not considered for budgeting purposes

g$.$ Each tire requires $0\mathrm{.}20$ hours of direct labor, direct labor costs average $$20$ per hour

h$.$ Variable manufacturing overhead is $$2$ per tire.

i$.$ Fixed manufacturing overhead includes $$3,000$ per quarter in depreciation and $$4,820$ per quarter for other costs, such as utilities, insurance, and property taxes

Fixed selling and administrative expenses include $$10,000$ per quarter for salaries, $$1,800$ per quarter for rent, $$500$ per quarter for insurance; and $$600$ per quarter for depreciation

k$.$ Variable selling and administrative expenses include supplies at $1\%$ of sales.

Capital expenditures include $$30\mathrm{.}000$ for new manufacturing equipment. to be Durchased and DaidI'm