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 $18 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 per month. The companys policy is to end each month with direct materials inventory equal to 40% of the next months direct materials requirement. At the end of August the company had 4,680 pounds of direct materials in inventory. The companys production budget reports the following.

Production Budget	September	October	November
Units to produce	5,200	7,000	6,000

(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.

MCO Leather Direct Materials Budget September October Units to produce Materials required per unit (pounds) Materials needed for production (pounds) Add: Desired ending materials inventory (pounds) Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases Required 1 Required 2 Required 3 Prepare direct labor budgets for September and October. (Round "DL hours required per unit" answ MCO Leather Direct Labor Budget September October Units to produce Direct labor hours required per unit Direct labor hours needed Direct labor cost per hour Cost of direct labor 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 Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead