MCO Leather manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $16 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $13,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's direct materials requirement. At the end of August the company had 3,480 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 5,100 October 6,500 November 6,600 (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. Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October. MCO Leather Direct Materials Budget October September 5,100 6,500 3 3 15,300 19,500 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 15,300 19,500 15,300 19,500 $ 0 $ $ 0 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 Units to produce Direct labor hours required per unit October Direct labor hours needed 0 0 Direct labor cost per hour Cost of direct labor $ 0 $ 0 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 $ 0 $ 0 Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead 0 $ 0