Exercise 20-15 Manufacturing: Direct materials, direct labor, and overhead budgets LO P1 MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 07 direct labor hours at a rate of $15 per hour. Varlable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $18,000 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 4,080 pounds of direct materials in Inventory The company's production budget reports the following Production Budet September October November Units to be produced 6,200 5.900 (1) Prepare direct noterials budgets for September and October (2) Prepare direct labor budgets for September and October (3) Prepare factory overhead budgets for September and October Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October. October MCO Leather Direct Materials Budget For the Months of September and October September Budgeted production (units) Matenals 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) Direct material cost per ib. Total budgeted direct materials RU Required 2 > Prepare direct labor budgets for September and October. (Roun 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