Prepare Homer's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round...

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Prepare Homer'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 Homer's direct materials budget. Homer, Inc. Direct Materials Budget For the Year Ended December 31 First Quarter Budgeted kits to be produced Direct materials (ounces) per kit Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed Less: Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per ounce Budgeted cost of direct materials purchases. 500 5 2,500 Second Quarter 270 5 1,350 Third Quarter 200 5 1,000 Fourth Quarter 750 5 3,750 240 Total 1,720 5 8,600 240 Direct materials are five ounces of plastic per kit and the plastic costs $2 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 920 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Homer desires a balance of 240 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.75 hours of direct labor at an average cost of $25 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.90 per kit, and fixed overhead is $170 per quarter. Prepare Homer'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 Homer's direct materials budget. Homer, Inc. Direct Materials Budget For the Year Ended December 31 First Quarter Budgeted kits to be produced Direct materials (ounces) per kit Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed Less: Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per ounce Budgeted cost of direct materials purchases. 500 5 2,500 Second Quarter 270 5 1,350 Third Quarter 200 5 1,000 Fourth Quarter 750 5 3,750 240 Total 1,720 5 8,600 240 Direct materials are five ounces of plastic per kit and the plastic costs $2 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 920 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Homer desires a balance of 240 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.75 hours of direct labor at an average cost of $25 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.90 per kit, and fixed overhead is $170 per quarter.

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