Production and Direct Labor Cost Budgets

Two-Leg Company manufactures slacks and jeans under a variety of brand names, such as Kickers and 101 Denims. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Kickers and 101 Denims shows estimated sales of 24,690 and 53,620 pairs, respectively, for May. The finished goods inventory is assumed as follows:

	Kickers		101 Denims
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 Kickers and 101 Denims for four different sewing operations:

	Direct Labor per 10 Pairs
	Kickers		101 Denims
Inseam	21	minutes	14	minutes
Outerseam	25		17
Pockets	8		10
Zipper	12		7
Total	66	minutes	48	minutes

a. Prepare a production budget for May.

Two-Leg Company
Production Budget
May (assumed data)
	Kickers	101 Denims
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 $13 wage per hour for the inseam and outerseam sewing operations and a $17 wage per hour for the pocket and zipper sewing operations.

Two-Leg Company
Direct Labor Cost Budget
May (assumed data)
	Inseam	Outerseam	Pockets	Zipper	Total
Kickers
101 Denims
Total minutes
Total direct labor hours
Direct labor rate	x $	x $	x $	x $
Total direct labor cost	$	$	$	$	$