[ASSESSMENT TASKS/OUTPUTS Part. OPERATING BUDGETS ‘ky High Parachute Company manufactures and sells parachutes to adventure companies, The company’s sales forecast for the coming year follows: [Budgeted sales (units) Other budgeted information fellows: ‘The budgeted sales price for each parachute Ie $2,000 ‘The company budgets production za that ending finished goods inventory equals 10 percent af the next quarter's budgeted sales Each parachute requires 20 cquare yards of a specialty matertal that costs $15 per square yard. ‘The campany purchasas direct materials 2a that 10 percent of aach quarter's production need are let ‘over at the end of the quarter to be used as boglaning inventory in the next quarter. At the beginning of the frst quarter, 70,000 square yards of material were on hand. Each parachute requires 15 hours of direct labor at a rate of $12 per hour Manufacturing overhead costs are budgeted at $1 million per quarter plus $50 per unit produced. Selling and administrative expenses are budgeted at $500,000 per quarter plus 10 percent of total sales Required: Prapare the folowing operating budgets for quarters 1 through 3, [You da nat have enough information to prepare allof the budgets for quarter 4.) Sales budget Praduction budget Direct materials purchases budget. Direct labor budget. ‘Manufacturing overhead budget. Selling and administrative expense budget