Question
1. Each unit requires 3 pounds of direct materials, which cost $6 per pound. The companys policy is to maintain direct materials inventory equal to
1. Each unit requires 3 pounds of direct materials, which cost $6 per pound. The companys policy is to maintain direct materials inventory equal to 20% of the next months direct materials requirement. As of June 30, the company has 3,240 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July.
MIAMI SOLAR | |
Direct Materials Budget | |
For Month Ended July 31 | |
Budget production (units) | 5,400 |
Materials needed for production (lbs.) | |
Total materials requirements (lbs.) | |
Materials to be purchased (lbs.) | |
Budgeted cost of direct materials purchases |
2. Each unit requires 4 hours of direct labor at a rate of $16 per hour. Prepare a direct labor budget for July.
-budget production: 5,400
-total hours needed:
-budgeted cost of direct labor:
3. Each unit requires 4 hours of direct labor at a rate of $16 per hour. Variable factory overhead is budgeted to be 60% of direct labor cost, and fixed factory overhead is $171,000 per month. Prepare a factory overhead budget for August.
MIAMI SOLAR | |
Factory Overhead Budget | |
For Month Ended August 31 | |
Budgeted total overhead | $0 |
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