Production and Direct Labor Cost Budgets

Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers and 501 Jeans. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 18,520 and 38,720 pairs, respectively, for May. The finished goods inventory is assumed as follows:

	Dockers		501 Jeans
May 1 estimated inventory	830		1,090
May 31 desired inventory	310		1,370

Assume the following direct labor data per 10 pairs of Dockers and 501 Jeans for four different sewing operations:

	Direct Labor per 10 Pairs
	Dockers		501 Jeans
Inseam	20	minutes	14	minutes
Outerseam	24		17
Pockets	8		10
Zipper	11		7
Total	63	minutes	48	minutes

a. Prepare a production budget for May.

LEVI STRAUSS & CO.
Production Budget
May
	Dockers	501 Jeans
Expected units to be sold
Total units
Total units to be produced

b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $11.00 wage per hour for the inseam and outerseam sewing operations and a $19.00 wage per hour for the pocket and zipper sewing operations.

LEVI STRAUSS & CO.
Direct Labor Cost Budget
May
	Inseam (minutes)	Outerseam (minutes)	Pockets (minutes)	Zipper (minutes)	Total
Dockers
501 Jeans
Total minutes
Total direct labor hours
Direct labor rate	$	$	$	$
Total direct labor cost	$	$	$	$	$