Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockersand 501 Jeans. Slacks and jeans are assembled by a variety of different sewing operations. Assume that thesales budgetfor Dockers and 501 Jeans shows estimated sales of 23,600 and 53,100 pairs, respectively, for May. The finished goods inventory is assumed as follows:

Dockers501 JeansMay 1 estimated inventory6701,660May 31 desired inventory4201,860

Assume the following direct labor data per 10 pairs of Dockers and 501 Jeans for four different sewing operations:

Direct Labor per 10 PairsDockers501 JeansInseam18minutes9minutesOuterseam2014Pockets69Zipper126Total56minutes38minutes

a.Prepare production budget for May. Prepare the budget in two columns: Dockersand 501 Jeans. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Levi Strauss and Co.Production BudgetFor Month Ending May 31 (assumed data)Dockers501 JeansExpected units to be soldMay 31 desired inventory

Total units availableMay 1 estimated inventory

Total units to be produced

Feedback

Remember to take into account expected units to be sold, desired units in ending inventory and estimated units in beginning inventory when calculating total units to be produced.

Learning Objective 4.

b.Prepare the May direct labor cost budget for the four sewing operations, assuming a $13 wage per hour for the inseam and outerseam sewing operations and a $15 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in four columns: inseam, outerseam, pockets, and zipper.

Levi Strauss and Co.Direct Labor Cost BudgetFor Month Ending May 31 (assumed data)InseamOuterseamPocketsZipperTotalDockers501 JeansTotal minutesTotal direct labor hoursDirect labor ratex $x $x $x $Total direct labor cost$$$$$

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