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Luther, Inc. manufactures model airplane kits and projects production at 150,270,600, and 400 kits for the next four quarters. (Click the icon to view the manufacturing information.) Prepare Luther's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hol for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the number. Begin by preparing Luther's direct materials budget. More info Direct materials are five 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 870 ounces, and the company desires to end each quarter with 20% of the materials needed for the next quarter's production. Luther desires a balance of 300 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.75 hours of direct labor at an average cost of $20 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.80 per kit, and fixed overhead is $155 per quarter. Direct materials (ounces) per kit Direct materials needed for production Total direct materials needed Less: Budgeted purchases of direct materials Direct materials cost per ounce Budgeted cost of direct materials purchases

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