Damp Less makes room dehumidifiers. It buys the electronic parts to make the dehumidifiers in kits, so it only purchases metal for the casings and the electronic kitted parts. Assembly is done in its one plant located in the Midwest. The company wants to put together a cost of goods sold set of budget schedules so it can plan its labor and materials purchases for the year. The data the company provides you is:

• Sales are expected to be 5,000 units in Quarter 1,6,000 units in Quarter 2,7,500 units in Quarter 3, and 6,000 units in Quarter 4. Quarter 1 sales for next year are expected to be 5,500 units.

• The electronics kits cost $65 each. The metal for the outside casings costs $15. Each finished goods unit uses one kit and one casing.

• The company likes to keep 20% of the next quarter’s sales on hand in finished goods. It started out the year with 20% of Quarter 1’s projected sales on hand. Each unit costs $100.

• The company keeps 25% of its raw materials needs for the next quarter on hand at the end of each quarter. It started the year with 1,000 electronic kits and 1,200 metal casings. Costs per part are unchanged from last year.

• It takes 20 minutes to assemble a finished unit. Labor is paid $18 per hour.

• Overhead includes rent for the building at $5,000 per month, electricity at $1,200 per month, supervision at $4,000 per month, and general costs of $1,800 per month. Variable overhead is $8 per unit.

REQUIRED:

For each quarter of the year, prepare:

a. A production budget

b. A materials budget for the two materials

c. A labor budget

d. An overhead budget

e. A cost of goods sold budget

f. An ending finished goods inventory budget for the year

g. If the company considers its cost of goods sold to be 60% of sales price, what price does the company have to charge for a finished unit?