QUESTION. Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a
Question:
QUESTION.
Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a cost of $3 per pound and 0.4 direct labor hours at a rate of $12 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $4,400 per month. The company’s policy is to maintain direct materials inventory equal to 30% of the next month’s materials requirement. At the end of February the company had 5,680 pounds of direct materials in inventory. The company’s production budget reports the following.
Production Budget | March | April | May | |||
Units to be produced | 4,000 | 5,200 | 5,600 | |||
(1) Prepare direct materials budgets for March and April.
(2) Prepare direct labor budgets for March and April.
(3) Prepare factory overhead budgets for March and April.
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta