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MCO Leather manufactures leather purses. Each purse requires 4 pounds of direct materials at a cost of $ 1 2 per pound and 0 .

MCO Leather manufactures leather purses. Each purse requires 4 pounds of direct
materials at a cost of $12 per pound and 0.6 direct labor hours at a rate of $16 per hour.
Variable overhead is budgeted at a rate of $4 per direct labor hour. Budgeted fixed
overhead is $10,500 per month. The company's policy is to end each month with direct
materials inventory equal to 25% of the next month's direct materials requirement. At the
end of August the company had 15,000 pounds of direct materials in inventory. The
company's production budget reports the following. (Click on the Direct Materials Budget,
Direct Labor Budget and Factory Overhead Budget Tabs below.)
Required:
(1) Prepare direct materials budgets for September and October.
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