MCO Leather manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $17 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $18,000 per month. The companys policy is to end each month with direct materials inventory equal to 30% of the next months materials requirement. At the end of August the company had 3,080 pounds of direct materials in inventory. The companys production budget reports the following.

Production Budget	September		October		November
Units to be produced	4,700		6,900		6,700

(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.

Prepare direct materials budgets for September and October.

MCO Leather
Direct Materials Budget
For the Months of September and October
	September	October
Budgeted production (units)
Materials requirements per unit (lbs.)
Materials needed for production (lbs.)	546,000,000	79,380,000
Budgeted ending inventory (lbs.)
Total materials requirements (lbs.)	546,000,000	79,380,000
Budgeted beginning inventory (lbs.)
Materials to be purchased (lbs.)	546,000,000	79,380,000
Direct material cost per lb.	$3
Total budgeted direct materials	$1,638,000,000	$0

Prepare direct labor budgets for September and October. (Round "DL hours required per unit" answers to one decimal place.)

MCO Leather
Direct Labor Budget
For the Months of September and October
	September	October
Budgeted production (units)	not attempted	not attempted
DL hours required per unit	not attempted	not attempted
Total direct labor hours needed	0	0
Direct labor rate per hour	not attempted	not attempted
Total budgeted direct labor	$0	$0

Prepare factory overhead budgets for September and October.

MCO Leather
Factory Overhead Budget
For the Months of September and October
	September	October
Total direct labor hours needed	not attempted	not attempted
VOH rate per DL hour	not attempted	not attempted
Budgeted variable overhead	0	0
Budgeted fixed overhead	not attempted