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Xavier Manufacturing Company manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 35 skeins of wool at
Xavier Manufacturing Company manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 35 skeins of wool at a cost of $6 per skein and 0.8 gallons of dye at a cost of $10 per gallon. All other materials are indirect. At the beginning of the year Xavier has an inventory of 466,000 skeins of wool at a cost of $1,165,000 and 4,400 gallons of dye at a cost of $27,280. Target ending inventory of wool and dye is zero. Xavier uses the FIFO inventory cost flow method. O Requirement 1. Prepare a direct material usage budget in both units and dollars. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. Direct Material Usage Budget in Quantity and Dollars Physical Units Budget Direct materials required for Blue rugs Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) Wool Dye To be purchased this period Wool Dye Material Wool Dye Total skeins gal (Click the icon to view the additional information.) There is no direct manufacturing labor cost for dyeing. Xavierbudgets 50dire manufacturing labor-hours to weave a rug at a budgeted rate of $17per hou 0.2machine-hours to dye each skein in the dyeing process. (Click the icon to view the budgeted overhead costs.) Read the requirements.
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