Question
Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a cost of $4 per pound and 0.4 direct labor
Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a cost of $4 per pound and 0.4 direct labor hours at a rate of $18 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $4,900 per month. The companys policy is to maintain direct materials inventory equal to 30% of the next months materials requirement. At the end of February the company had 5,780 pounds of direct materials in inventory. The companys production budget reports the following.
Production Budget | March | April | May | |||
Units to be produced | 3,600 | 4,700 | 5,400 | |||
(1) Prepare direct materials budgets for March and April.
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(2) Prepare direct labor budgets for March and April
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(3) Prepare factory overhead budgets for March and April.
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