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MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor
MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $12 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $17,000 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 3,600 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,500 October 6,800 November 6,100 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October. MCO Leather Direct Materials Budget September October Units to produce 4,500 6,800 Materials required per unit (pounds) Materials needed for production (pounds) 3 3 12,900 19,800 7,920 7,440 Total materials required (pounds) 20,820 27,240 3,440 7,920 Materials to purchase (pounds) 17,380 19,320 $ 5 $ 5 Cost of direct materials purchases $ 86,900 $ 96,600 MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $12 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $17,000 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 3,600 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget September Units to produce 4,500 October 6,800 November 6,100 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare direct labor budgets for September and October. (Round "DL hours required per unit" answers to one decimal place.) MCO Leather Direct Labor Budget September October Units to produce Direct labor hours required per unit Direct labor hours needed Budgeted units sales for month Cost of direct labor 4,300 6,600 0.7 0.7 3,010 4,620 $ 12 $ 12 $ 36,120 $ 55,440 MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $12 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $17,000 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 3,600 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,500 October 6,800 November 6,100 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare factory overhead budgets for September and October. MCO Leather Factory Overhead Budget September October Direct labor hours needed 3,010 4,620 Variable overhead rate per direct labor hour $ 2 $ 2 Budgeted variable overhead $ 6,020 $ 9,240 Budgeted fixed overhead 16,000 16,000 Budgeted total factory overhead $ 22,020 $ 25,240
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