Prepare budgets for Allison Manufacturing based on the information below: Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities.

Projected sales in units for the coming $5$ months follow:

January $40,000$

February $60,000$

March $80,000$

April $80,000$

May $72,000$

The following data pertain to production policies and manufacturing

specifications followed by Allison Manufacturing:

A: The direct labor used per unit of output is $3$ hours. The average direct labor cost per hour is $$14\mathrm{.}25.$

B: Overhead each month is estimated using a flexible budget formula. $($Note: Activity is measured in direct labor hours.$)$

Prepare a monthly operating budget for the first quarter with the following schedules. $($Note: Assume that there is no change in work$-$in$-$

process inventories.$)$

A$.$ Direct materials purchases budget

d$.$ Direct labor budget.

Allison Manufacturing

Direct Materials Purchases Budget $($Schedule $3)$

For the Quarter Ended March $31$

Units to be produced $($Sch$.2)$

$$ Direct materials per unit

Production needs

Desired ending inventory

Total needs

Less: Beginning inventory

Direct materials to be purchased

$$ Cost per unit

Total cost

d$.$

Allison Manufacturing

Direct Labor Budget $($Schedule $4)$

For the Quarter Ended March $31$