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 predetermined overhead allocation rate to two decimal places. round other amounts to the nearest whole number.

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. round amounts to two decimal places.

Aquatic marine stores company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. aquatic uses standard costs to prepare its flexible budget. for the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: direct materials: 3 pounds per unit; $ 6 per pound direct labor: 4 hours per unit; $ 19 per hour during the first quarter, aquatic produced 5 comma 000 units of this product. actual direct materials and direct labor costs were $ 65 comma 000 and $ 330 comma 000, respectively. for the purpose of preparing the flexible budget, calculate the total standard direct materials cost at a production volume of 5 comma 000 units.

(a) what was the opportunity cost of non-gm food for many buyers before 2008? (b) why did they prefer the alternative? (c) what was the opportunity cost in 2008? (d) why did it change?

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.