811 3 4 5 XVfx A B C D E G MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.8 direct labor hours at a rate of $16 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed 6 overhead is $10,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's direct materials requirement. At 7 the end of August the company had 3,680 pounds of direct materials in inventory. The 8 company's production budget reports the following. (Click on the Direct Materials Budget, Direct Labor Budget and Factory Overhead Budget Tabs below.) 9 10 Production Budget 11 Units to produce 12 13 Direct materials per unit 14 Direct materials cost 15 Direct labor hours (DLHS) per unit 16 Direct labor rate 17 Budgeted variable overhead 18 Budgeted fixed overhead 19 Direct materials policy 20 August ending materials 21 Required: September 4,600 October November 6,200 5,800 2 pounds $4 per pound 0.80 DLHS per unit $16 per DLH $2 per DLH $10,000 per month 40% of next month's direct materials requirement 3,680 pounds 22. (1) Prepare direct materials budgets for September and October. > Workbook Statistics + Question Data Direct Materials Budget Direct Labor Budget Factory Overhead Budget W B11 F LL 7 A B D materials inventory equal to 40% of the next month's direct materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The 8 company's production budget reports the following. (Click on the Direct Materials 9 Budget, Direct Labor Budget and Factory Overhead Budget Tabs below.) 10 Production Budget 11 Units to produce 12 13 Direct materials per unit 14 Direct materials cost 15 Direct labor hours (DLHS) per unit 16 Direct labor rate 17 Budgeted variable overhead 18 Budgeted fixed overhead 19 Direct materials policy 20 August ending materials 21 Required: September October November 6,200 5,800 4,600 2 pounds $4 per pound 0.80 DLHs per unit $16 per DLH $2 per DLH $10,000 per month E 40% of next month's direct materials requirement 3,680 pounds 22 (1) Prepare direct materials budgets for September and October. 23 (2) Prepare direct labor budgets for September and October. 24 (3) Prepare factory overhead budgets for September and October. 25 15 H15 XV fx B C D E 1 2 Required: 3 (1) Prepare direct materials budgets for September and October. 4 5 6 7 MCO Leather Direct Materials Budget Units to produce 9 Materials required per unit (pounds) 10 Materials needed for production (pounds) 11 Add: Desired ending materials inventory 12 Total materials required (pounds) 13 14 Materials to purchase (pounds) 15 16 Budgeted direct materials purchases 17 18 September 4,600 2 October 6,200 2 9,200 12,400 A1 Xfx Accessibility tab summary: A statement 2 for student presentation is A B C D E 1 2 (2) Prepare direct labor budgets for September and October. 3 4 5 6 7 Units to produce 00 8 MCO Leather Direct Labor Budget September October 9 Direct labor hours needed 10 11 Budgeted direct labor cost 12 13 14 1 2 22 A B C D 3 (3) Prepare factory overhead budgets for September and October. 4 MCO Leather Factory Overhead Budget 5 6 7 8 Direct labor hours needed 9 10 Budgeted variable overhead 11 12 Budgeted total factory overhead 13 14 15 September October LL E