Exercise 20-15 Manufacturing: Direct materials, direct labor, and overhead budgets LO P1 MCO Leather manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $4 pet pound and 07 labor hours at a rate of $18 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour Fixed manufacturing overhead is $13,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's materials requirement. At the end of August the company had 2,880 pounds of direct materials in inventory The company's production budget reports the following Production Budget Units to be produced September 5,188 October 6,700 November 6,300 (1) Prepare direct materials budgets for September and October (2) Prepare direct labor budgets for September and October (3) Prepare factory overhead budgets for September and October MCO Leather Direct Materials Budget For the Months of September and October September October Budgeted production (units) 5,100 6,700 Materials requirements per unit (lbs.) Materials needed for production (lbs.) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (lbs.) 0 0 Direct material cost per lb. Total budgeted direct materials 0 $ MCO Leather Direct Labor Budget For the Months of September and October September October Budgeted production (units) DL hours required per unit Total direct labor hours needed Direct labor rate per hour Total budgeted direct labor $ 0 $ MCO Leather Factory Overhead Budget For the Months of September and October September October Total direct labor hours needed VOH rate per DL hour Budgeted variable overhead Budgeted fixed overhead Total budgeted factory overhead