Austin, Inc. manfactures model airplane kits and projects production at 300, 420

Question

Austin, Inc. manfactures model airplane kits and projects production at 300, 420,250, and 600 kits for the mext four quarters. Direct materials are $3 per kit Indirect materials are considered insignicant and are nat incladed in the geting pro cess Be nning Raw Materials Inventory is S850, and the company desies to end each quarter with 10% of the matnials needed fr he nt quarter's produ i Aust draws balance of $850 i, Raw arab Inventory at the end of the fourth quarter Each kit requires 0.50 hours of drect labor at an average cost of 555 per hour Manufacturing overhead is allocated using direct labor hours as the allocation base Variable overhead is $0 90 per kit, and feced everhead is $125 per quarter Peepare Austin's Grect materials budget, direct labor budget, and manufacturing overhoad budget for the year Round the direct labor hours needed for production budgeted overhead costs, and predeteemined overhead allocation rate to two decimal places Round other amounts to the nearest whole number Begin by preparing Austin's drect materials budget Austin, Inc. Direct Materials Budget For the Year Ended December 31 Second Td Quarter Quartr Quarter Quarter Frst Fourth 300 420 260 Budgeted kits to be produced Direct materlals cost per unit D'act materials needed for production Ps Desired direct materials In ending Inventory Total Grect materials needed 1260 1026 2271

Explanation / Answer

Answer: Direct Labour Budget

Manufacturing Overhead Budget

Austin Inc Direct Labor Budget For the Year Ended December 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Budgeted Production in units (a) 300 420 250 600 1570 Direct Labour Hours required Per unit (b) 0.5 0.5 0.5 0.5 0.5 Direct Labour Hours needed for the Production(c ) = (a x b) 150 210 125 300 785 Cost per Direct Labour hour (d) $55 $55 $55 $55 $55 Budgeted Direct Labour cost (c x d) $8,250 $11,550 $6,875 $16,500 $43,175

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