Production and Direct Labor Cost Budgets

Two-Leg Company 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 21,610 and 38,720 pairs, respectively, for May. The finished goods inventory is assumed as follows:

	Dockers		501 Jeans
May 1 estimated inventory	970		1,090
May 31 desired inventory	360		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	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. 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.

Two-Leg Company
Production Budget
For Month Ending May 31 (assumed data)
	Dockers	501 Jeans
Expected units to be sold
Total units available
Total units to be produced

b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $12 wage per hour for the inseam and outerseam sewing operations and a $18 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in four columns: inseam, outerseam, pockets, and zipper.

Two-Leg Company
Direct Labor Cost Budget
For Month Ending May 31 (assumed data)
	Inseam	Outerseam	Pockets	Zipper	Total
Dockers
501 Jeans
Total minutes
Total direct labor hours
Direct labor rate	x $	x $	x $	x $
Total direct labor cost	$	$	$	$	$