Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600 kits for the next four quarters. Direct materials are 4 ounces of plastic per kit and the 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. Grady desires a balance of 200 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.20 per kit, and fixed overhead is $165 per quarter. Prepare Grady’s direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for production, budgeted overhead costs, and pre-determined overhead allocation rate to two decimal places.
Refer to the budgets prepared. Determine the cost per kit to manufacture the model airplane kits. Grady projects sales of 100, 150, 100, and 200 kits for the next four quarters. Prepare a cost of goods sold budget for the year. Grady has no kits in beginning inventory.

Grady, Inc.'s Direct Materials Budget, Direct Labor Budget, and Manufacturing Overhead Budget for the year are as follows:

Direct Materials Budget

                                            Quarter 1   Quarter 2  Quarter 3  Quarter 4   Total

Projected production                650          500            450          600      2,200

Ounces of plastic per kit              4               4                 4               4              4

Total materials required         2,600     2,000          1,800        2,400     8,800

Ending materials inventory        200         180             240           200

Raw materials available          2,800      2,180         2,040        2,600

Beginning materials inventory  850        200              180           240

Purchases of raw materials     1,950      1,980          1,860        2,360

Cost of materials purchased $1,950  $1,980     $1,860      $2,360  $8,150

Direct Labor Budget

                                            Quarter 1   Quarter 2  Quarter 3  Quarter 4   Total

Projected production                650          500            450          600      2,200

Hours per kit                              0.10          0.10            0.10          0.10         0.10

Total direct labor hours reqd.    65             50              45             60         220

Average cost per hour              $10            $10            $10            $10          $10

Total direct labor cost           $650         $500        $450        $600   $2,200

Manufacturing Overhead Budget:

Variable overhead                 $130         $100            $90         $120      $440

Fixed overhead                     $165         $165           $165         $165      $660

Total manufacturing o/h      $295        $265          $255        $285     $1,100

Manufacturing overhead/unit $0.45     $0.53       $0.57     $0.475     $0.50

Cost per Kit:

Direct materials cost per unit =  $4.00

Direct labor cost per unit            $1.00

Manufacturing overhead           $0.50

Cost per kit =                              $5.50

Cost of goods sold budget for the year:

                                 Quarter 1   Quarter 2  Quarter 3  Quarter 4   Total

Quarter Sales                100            150           100            200         550

Cost per unit             $5.50

Cost of goods sold   $550       $825         $550        $1,100       $3,025

Learn more: https://brainly.com/question/13767214

Ahoy do you need your rate of return to be greater than inflation

While some brokers still operate exclusively in person or online, the distinction between the three types has become increasingly