Exercise 20-15 Manufacturing: Direct materials, direct labor, and overhead budgets LO P1 MCO Leat ther Goods manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $3 per pound and 07 direct labor hours at a rate of $17 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed anufacturing overhead is $17,000 per month. The company's policy s to end each month with direct materials inventory equal to 30% of the next month's materials requirement At the end of August the company's production budget reports the following company had 3,080 pounds of direct materials in inventory. The Product ion Bud Units to be produced 5,000 6,500 6,400 (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