Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year:

a. Estimated sales at $125 per unit:

Month	Sales
January	25,000 units
February	30,000 units
March	45,000 units
April	50,000 units

b. Estimated finished goods inventories:

Month	Finished Goods Inventory
January 1	2,000 units
January 31	10% of next months sales
February 28	10% of next months sales
March 31	10% of next months sales

c. Work in process inventories are estimated to be insignificant (zero).

d. Estimated direct materials inventories:

Month	Direct Materials Inventory
January 1	1,000 lbs.
January 31	1,500 lbs.
February 28	2,000 lbs.
March 31	2,500 lbs.

e. Manufacturing costs:

Line Item Description	Per Unit
Direct materials (0.8 lb. per unit $15 per lb.)	$ 12
Direct labor (2.5 hrs. per unit $24 per hr.)	60
Variable factory overhead ($1.20 per direct labor hour)	3
Fixed factory overhead ($200,000 per month, allocated using 40,000 units)	5
Total per-unit manufacturing costs	$80

f. Selling expenses:

Line Item Description	Amount
Variable selling expenses	$4 per unit
Fixed selling expenses	$150,000
Administrative expenses (all fixed costs)	$400,000

4. Prepare a direct labor cost budget for the first quarter.

Line Item Description	January	February	March	First Quarter
Units to be producedDirect labor required per unitDirect labor hours required for productionDirect labor hourly rateDirect labor costUnits to be produced
Direct labor required per unitDirect labor hours required for productionDirect labor hourly rateDirect labor costEstimated units soldDirect labor required per unit
Direct labor hours required for productionDirect labor hourly rateDirect labor costEstimated units soldSelling price per unitDirect labor hours required for production
Desired ending inventoryDirect labor hourly rateDirect labor costEstimated units soldSelling price per unitDirect labor hourly rate
Desired ending inventoryDesired beginning inventoryDirect labor costEstimated units soldSelling price per unitDirect labor cost

Question Content Area

5. Prepare a factory overhead cost budget for the first quarter.

Line Item Description	January	February	March	First Quarter
Variable factory overhead:
Budgeted direct labor hoursBudgeted variable factory overheadBudgeted fixed factory overheadDirect labor required per unitVariable factory overhead rateBudgeted direct labor hours
Budgeted variable factory overheadBudgeted fixed factory overheadDirect labor required per unitDirect labor costVariable factory overhead rateVariable factory overhead rate
Budgeted variable factory overheadBudgeted fixed factory overheadDirect labor required per unitDirect labor costDirect labor hourly rateBudgeted variable factory overhead
Fixed factory overhead:
Budgeted fixed factory overheadDirect labor required per unitDirect labor costDirect labor hourly rateDirect labor hoursBudgeted fixed factory overhead
Total factory overhead cost