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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 24,690 and 53,620 pairs, respectively, for May. The finished goods inventory is assumed as follows:

Dockers 501 Jeans
May 1 estimated inventory 1,100 1,510
May 31 desired inventory 410 1,890

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
Plus May 31 desired inventory
Total units
Less May 1 estimated inventory
Total units to be produced

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a. Expected sales plus desired ending inventory minus estimated beginning inventory.

b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $13.00 wage per hour for the inseam and outerseam sewing operations and a $16.00 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 $ $ $ $ $

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