32. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead. Hershel's Chocolate produces chocolate bars and sells them by the case (1 unit = 1 case). Information to be used for the operating budget this coming year follows:

Average sales price for each case is estimated to be $25. Unit sales for this coming year, ending December 31, are expected to be as follows:

First quarter	80,000
Second quarter	84,000
Third quarter	88,000
Fourth quarter	97,000

• Finished goods inventory is maintained at a level equal to 15 percent of the next quarter's sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 13,000 units.
• Each unit of product requires 5 pounds of cocoa beans for direct materials, at a cost of $3 per pound. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter's materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 43,000 pounds.
• Each unit of product requires 0.10 direct labor hours at a cost of $14 per hour.

Variable manufacturing overhead costs are

Indirect materials	$0.20 per unit
Indirect labor	$0.15 per unit
Other	$0.10 per unit

Fixed manufacturing overhead costs per quarter are

Salaries	$80,000
Other	$70,000
Depreciation	$55,625

Required:

1. 1. prepare a sales budget
   2. Prepare a production budget
   3. Prepare a direct materials purchases budget
   4. Prepare a direct labor budget
   5. Prepare a manufacturing overhead budget
   6. As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters?

Please provide the budget and a step by step for each budget