The Molding Department of the Western Corp. produces molded brass belt buckles for later use in assembling leather belts. The buckles are produced in two sizes, small and large.

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Small Material (brass) Labor 4 oz. Large 8 oz.. 6 min. 6 min. Brass is purchased under a long-term contract at $.64 per pound. Current labor con- tracts call for wages of $10.00 per hour in the molding operation. Factory overhead is fixed at $8,000 per month and is considered uncontrollable at the departmental level. (a) Compute the standard prime costs of (1) a small buckle, (2) a large buckle. (b) Develop a budget for the Molding Department for the month of July assuming expected production is 12,000 small buckles and 8,000 large ones. (c) Sales forecasts have been inaccurate during past months, often by as much as 25%. Develop a budget which projects costs for the month at (1) 25% below the expected production level, (2) 25% above the expected production level.