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Exercise 27-4 Objective: To prepare direct materials purchases, direct labor cost, factory overhead, and cost of goods manufactured budgets Foxhurst Corporation plans to produce 1,700 units of stainless steel watches in 20X1. Per-unit direct materials costs are $200. The firm begins the year with an inventory of $6,000 and plans to end the year with an inventory of $9,000. Per-unit labor costs are $100, while per-unit factory overhead costs are estimated at 80% of direct labor costs. Directions: Prepare the following budgets for 20X1: direct materials purchases, direct labor cost, factory overhead, and cost of goods manufactured