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Production and Direct Labor Cost Budgets Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers and 501
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 23,600 and 53,100 pairs, respectively, for May. The finished goods inventory is assumed as follows: Dockers 501 Jeans May 1 estimated inventory 670 1,660 May 31 desired inventory 420 1,860 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 Inseam 18 minutes Outerseam 20 501 Jeans 9 minutes 14 Pockets 6 9 Zipper 12 6 Total 56 minutes 38 minutes a. Prepare a production budget for May. Prepare the budget in two columns: Dockers and 501 Jeans. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Levi Strauss & Co. Production Budget For the Month Ending May 31 (assumed data) Expected units to be sold Total units available Total units to be produced Dockers 501 Jeans b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $13 wage per hour for the inseam and outerseam sewing operations and a $15 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in four columns: inseam, outerseam, pockets, and zipper. Dockers 501 Jeans Total minutes Levi Strauss & Co. Direct Labor Cost Budget For the Month Ending May 31 (assumed data) Inseam Outerseam Pockets Zipper Total Total direct labor hours Direct labor rate x $ x $ x $ Total direct labor cost FA +A +A
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