Step 2

E-Lan Electronics is now preparing the budget for direct materials purchases, direct labor, and manufacturing overhead.

Each unit production requires 1 Gizmo and 3 Flobs

E-Lan pays$ 7 per Gizmo and $ 2.50 per Flob

Management prefers to maintain ending raw materials inventory equal to materials 30% of next month needed in production.

Raw materials inventory at the end of last year met that requirement.

Each unit of production requires 0.8 direct labor hours at a cost of $ 18.00 per hour.

Variable overhead costs are:

Indirect materials $ 0.38 per unit

Indirect Labor $ 1.20 per unit

Other$ 1.12 per unit

Fixed overhead costs per month:

Salaries $ 212,000

Rent $ 16,000

Depreciation $ 27,000

1. I need to prepare direct materials purchases budget for E-Lan Electronics

2. I need to prepare direct labor budget for E-Lan Electronics

3. I need to prepare manufacturing overhead budget for E-Lan Electronics