Exercise $20-16$

Manufacturing: Direct materials, direct labor, and overhead budgets

P$1$

Garden Yeti manufactures garden sculptures. Each sculpture requires $8$ pounds of direct materials at a cost of $$3$ per pound and $0\mathrm{.}5$ direct labor hour at a rate

of $$18$ per hour. Variable overhead is budgeted at a rate of $$3$ per direct labor hour. Budgeted fixed overhead is $$4,000$ per month. The company's policy is to

maintain direct materials inventory equal to $20\%$ of the next month's direct materials requirement. At the end of February the company had $5,280$ pounds of

direct materials in inventory. The company's production budget reports the following. Prepare budgets for March and April for $(1)$ direct materials, $(2)$ direct

labor, and $(3)$ factory overhead.