Luther, Inc. manufactures model airplane kits and projects production at 200, 450, 500, and 800 kits for the next four quarters. Direct materials are 7 ounces of plastic per kit and the plastic costs $5 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 860 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 230 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.25 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 $0.25 per kit, and fixed overhead is $125 per quarter. Luther, Inc. Direct Materials Budget For the Year Ended December 31 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted kits to be produced 200 450 500 800 1950 Direct materials (ounces) per kit 7 7 7 7 Direct materials needed for production 1400 3150 3500 5600 13650 Plus: Desired direct materials in ending inventory 630 700 1120 230 230 Total direct materials needed 2030 3850 4620 5830 13880 Less: Direct materials in beginning inventory 860 630 700 1120 860 Budgeted purchases of direct materials 1170 3220 3920 4710 13020 Direct materials cost per ounce

Birdie Limited is a manufacturing company producing a variety of golf clubs. It operates from one factory that is geographically separated from its head office. The components for the clubs are assembled in the assembling department; they are then passed through to the finishing department where they are painted and packed. There are three service cost centres: administration, stores, and manufacturing support. The following costs were collected for the year to 31 May 2021: ETT Department Number of Allocated cost centre overhead costs (£,000) 225 employees 67 Assembling Finishing Administration 60 134 84 300 89 Stores 17 Manufacturing support 120 34 Additional information: The allocated cost centre overhead costs are all considered to be indirect costs as far as specific units are concerned. During the year to 31 May 2021, 208,000 machine hours were worked in the assembling department, and 270,000 direct labour hours in the finishing department. During the year to 31 May 2021, the…

Define target full product cost.

In detail discuss what are  the advantages and disadvantages of using FIFO for process costing. In periods when costs are increasing how will FIFO affect reported net income? What about in periods of declining costs? Explain.