Austin, Inc, manufactures model airplane kits and projects production at 350, 530, 500, and 700 kits for the next four quarters. Direct materials are $? per kit indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is $400, and the company desires to end each quarter with 30% of the materials needed for the next quarter's production. Austin desires a balance of $400 in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.25 hours of direct labor at an average cost of $50 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base Variable overhead is $0.30 per kit, and fixed overhead is $135 per quarter. Prepare Austin's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. Begin by preparing Austin's direct materials budget Direct materials cost per unit Direct materials needed for production Plus: Total direct materials needed Austin, Inc. Direct Materials Budget For the Year Ended December 31 First Quarter Second Quarter Third Quarter Fourth Quarter Total
Austin, Inc, manufactures model airplane kits and projects production at 350, 530, 500, and 700 kits for the next four quarters. Direct materials are $? per kit indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is $400, and the company desires to end each quarter with 30% of the materials needed for the next quarter's production. Austin desires a balance of $400 in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.25 hours of direct labor at an average cost of $50 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base Variable overhead is $0.30 per kit, and fixed overhead is $135 per quarter. Prepare Austin's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. Begin by preparing Austin's direct materials budget Direct materials cost per unit Direct materials needed for production Plus: Total direct materials needed Austin, Inc. Direct Materials Budget For the Year Ended December 31 First Quarter Second Quarter Third Quarter Fourth Quarter Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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