GPB Company produces stuffed toy animals; one of these is “Hootie the Owl.” Each hootie takes 0.25 yard of fabric (white with irregular black splotches) and eight ounces of polyfiberfill. Material costs $3.50 per yard and polyfiberfill is $0.05 per ounce. GPB has budgeted production of hooties for the next four months as follows:

Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 20 percent of the following month’s production needs and sufficient polyfiberfill be in inventory to satisfy 40 percent of the following month’s production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.
Each hootie produced requires (on average) 0.35 direct labor hour. The average cost of direct labor is $14 per hour.
Required:
1. Prepare a direct materials purchases budget of fabric for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total.
2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total.
3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and the direct labor cost for each month and for the quarter in total.LO1

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Units October 42,000 November 90,000 December January 50,000 40,000