Problem I. Master budgets (25 points) als budget and direct labor budget for the first quarter. Round the pare Grady's di direct labor hours needed for production to two decimal places. Round other amounts to the nearest whole number Grady, Inc, manufactures model airplane kits and projects production to at 650 for the next quarter. Direct materials are 4 ounces of plastic per kit and plastic costs $1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 850 ounces and the company desires to end each quarter with 10% of the materials needed for the next quarter's production (which will be 500 kits). Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Grady Inc. Direct materials budget For 1t quarter of year First Quarter Budgeted kits to be produced Direct materials needed per kit Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed Less: Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per pound Budgeted cost of direct materials needed