# Question: Willison Company produces stuffed toy animals one of these is

Willison Company produces stuffed toy animals; one of these is Betty Rabbit. Each rabbit takes 0.2 yards of fabric and six ounces of polyfiberfill. Fabric costs \$ 3.50 per yard, and polyfiberfill is \$ 0.05 per ounce. Willison has budgeted production of stuffed rabbits for the next four months as follows:
Units
October ......... 20,000
November ......... 40,000
December ......... 25,000
January ......... 30,000
Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 15 percent of the following monthâ€™s production needs and sufficient polyfiberfill be in inventory to satisfy 30 percent of the following monthâ€™s production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy. Each rabbit produced requires (on average) 0.10 direct labor per hour. The average cost of direct labor is \$ 15.50 per hour.
Required:
1. Prepare a direct materials purchases budget of fabric for the last quarter of the year, showing purchases in units and in dollars for each month and for the quarter in total.
2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year, showing purchases in units and in dollars for each month and for the quarter in total.
3. Prepare a direct labor budget for the last quarter of the year, showing the hours needed and the direct labor cost for each month and for the quarter in total.

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