Direct Materials Purchases Budget: Direct Labor Budget Macchu Company produces stuffed toy animals; one of these is "Andie the Llama." Each Andie takes 0.20 yard of fabric (white with irregular black splotches) and 8 ounces of polyfiberfill. Fabric costs $3.40 per yard and polyfiberfill is $0.05 p ounce Macchu has budgeted production of Andies for the next four months as follows: Units October 41,000 November 80,000 December 50,000 January 40,000 Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 20 percent of the following month production needs and sufficient polyfiberfill be in inventory to satisfy 15 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 Andie produced requires con average) 0.10 direct labor hour. The average cost of direct labor is $15 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. Round your answers to the nearest cent, if required. Macchu Company Direct Materials Purchases Budget for Fabric For the Fourth Quarter October November December Total Units produced 80,000 50.000 171,000 DM per unit (yd.) 0.20 0.20 41,000 0.20 0.20 Production needs 8,200 16,000 10,000 34,200 Desired ending inventory (yd.) Total needed Production needs 8.200 16.000 10.000 34.200 1.640 3.200 Desired ending inventory (yd.) Total needed Less: Beginning inventory DM to be purchased (yd.) Cost per yard Total purchase cost Feedback Check My Work The purchases amount can be determined by considering beginning and ending (desired) inventory amounts. Also, consider expected usage. 2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year showing purchases in units ar in dollars for each month and for the quarter in total. Round your answers to the nearest cent, if required. Macchu Company Direct Materials Purchases Budget for Polyfiberfill For the Fourth Quarter October November December Total Units produced 41.000 80.000 50,000 DM per unit (oz.) Production needs Desired ending inventory (oz.) Total needed Less: Beginning inventory DM to be purchased (oz.) 171.000 Cost per ounce Less: Beginning inventory DM to be purchased (oz.) Cost per ounce Total purchase cost Feedback Check My Work Partially correct 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. Round your answers to the nearest cent, if required. Macchu Company Direct Labor Budget For the Fourth Quarter October November December Total Units produced 41.000 80,000 50,000 171,000 Direct labor time per unit (hours) Direct labor hours needed Cost per direct labor hour O Total direct labor cost III Feedback Check My Work In the direct labor budget, the wage rate used is the average wage paid the direct laborers associated with production
