5. value: 3.00 points PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, d] Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $64. Wesley expects the following unit sales: January February March April May 5,600 5,800 6,300 6,100 5,500 Wesley's ending finished goods inventory policy is 25 percent of the next month's sales. Suppose each handisaw takes approximately 60 hours to manufacture, and Wesley pays an average labor wage of $26 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending raw materials inventory policy of 20 percent of the following month's production requirements. Materials other than the housing unit total $4.50 per handisaw. Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required: 1. Compute the following for the first quarter: (Do not round your intermediate calculations.) January $ 358,400 February $ 371,200 March $ 403,200 1st Quarter total $ 1,132,800 1. 2. Budgeted Sales Revenue Budgeted Production in Units Budgeted Cost of Raw Material Purchases for the Plastic Housings Budgeted Direct Labor Cost 4. References eBook & Resources Worksheet Learning Objective: 08-03a Prepare the following components of the operating budget: Sales budget. Learning Objective: 08-03d Prepare the following components of the operating budget: Direct labor budget. PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, d] Learning Objective: 08-03b Prepare the following components of the operating budget: Production budget. Difficulty: 3 Hard Learning Objective: 08-03c Prepare the following components of the operating budget: Raw materials purchases budget