Working in the production area of a manufacturing company is right where Kevin feels at home. Several of his family members had

worked in similar environments throughout their careers, and he loves the idea of building something that consumers will enjoy. While

others on his team passed on the chance to build the budget, Kevin really enjoys seeing how the pieces fit together like a puzzle. His

task this month: put the three key production budgets together, culminating in a COGS budget for his division. He gathers the

following information in order to get to work.

Budgeted production in units for October is $1,800$; for November, $1,700$; and for December, $2,000.$

Every unit requires $4$ pounds of direct material. The company desires an ending direct materials inventory of $25\%$ of the

following month's production needs. October $1$ DM Inventory is budgeted to be $60$ pounds.

Every unit requires $1\mathrm{.}20$ DL hours.

MOH is allocated based on DL costs, at a budgeted variable rate of $$0\mathrm{.}25$ per dollar of DL cost$.$

Budgeted monthly Fixed MOH costs are supervisors' salaries of $$2,000,$ depreciation of $$1,800$ and property taxes and

insurance of $$900.$

There is no budgeted beginning or ending WIP Inventory for October.

October $1$ FG Inventory is budgeted to be $100$ units at an estimated total cost of $$7,000($per management estimate$).$

Budgeted FG Inventory on October $31$ is $180$ units.

Prepare a DM purchases budget for the month of October. The budgeted cost is $$4\mathrm{.}20$ per pound. $($Round DM cost per pound to $2$

decimal places, eg$.15\mathrm{.}25.)$

Budgeted Units to be Produced

October

Total Production Needs $($Pounds$)$

Target Ending DM Inventory $($Pounds$)$

Total DM inventory Needs $($Pounds$)$

Bezinning DM inventory $($Pounds$)$

Budgeted Pounds of DM to be Purchased Y

Total Budgeted Cost of DM Purchases

$($b$)$

Prepare the October DL budget using a labor rate of $$\frac{13}{?}$ hour. $($Round hours of DL per unit to $2$ decimal places, e$.$g$.15\mathrm{.}25.)$

October

Budgeted Units to be Produced

Total Budgeted DL Hours Needed

Total Budgeted DL Hours Needed

Hours of DL per Unit

Total Budgeted DL Cost