In order to determine the loan amount, your manager asks you to prepare the following budgets:

sales budget,

production budget,

direct materials purchases budget,

direct labor budget, and

overhead budget.

Directions

Prepare each budget of this assignment in one Excel file. Be sure to show your calculations and label your work for full credit.

The Forty Company estimates for the next year are as follows:

Quarter $1$ sales: $530,000$ units

Quarter $2$ sales: $765,000$ units

Quarter $3$ sales: $1,055,000$ units

Quarter $4$ sales: $825,000$ units

Quarter $1$ of the following year sales: $600,000$ units

Price of the product $$25$

Beginning finished goods inventory: $50,000$ units

The company policy is to have $10\%$ of next quarter's sales in ending inventory.

The product contains only two materials $($Material A and Material B$).$

The product requires four units of Material A costing $$2.$

The product requires two units of Material B costing $$1.$

The beginning materials inventory for Material A is $315,000.$

The beginning materials inventory for Material B is $157,500.$

Company policy is to have $15\%$ of next quarter's material needs in ending inventory

Desired ending inventory for the year in Material A is $450,000.$

Desired ending inventory for Material B is $240,000.$

The direct labor required for each product is $25$ hours at an average rate of $$9$ per hour.

The variable overhead rate is $$5$ per direct labor hour.

Fixed overhead is expected to be $$50,000$ per quarter.