MCO Leather manufactures leather purses. Each purse requires $2$ pounds of direct materials at a cost of $$3$ per pound and

$0\mathrm{.}7$ direct labor hour at a rate of $$13$ per hour. Variable overhead is budgeted at a rate of $$2$ per direct labor hour. Budgeted

fixed overhead is $$16,000$ per month. The company's policy is to end each month with direct materials inventory equal to

$40\%$ of the next month's direct materials requirement. At the end of August the company had $3,520$ pounds of direct

materials in inventory. The company's production budget reports the following.

$4\mathrm{.}21$

points

$(1)$ 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.

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Required $1$

Prepare direct materials budgets for September and October.