MCO Leather manufactures leather purses. Each purse requires 2pounds of direct materials at a cost of $5 per pound and 0.7 directlabor hour at a rate of $11 per hour. Variable overhead is budgetedat a rate of $2 per direct labor hour. Budgeted fixed overhead is$18,000 per month. The company’s policy is to end each month withdirect materials inventory equal to 30% of the next month’s directmaterials requirement. At the end of August the company had 2,880pounds of direct materials in inventory. The company’s productionbudget reports the following.
Mco Leather Manufactures Leather Purses Each Purse Requires 2 Pounds Of Direct Materials At A Cost Of 5 Per Pound And 1 (210.63 KiB) Viewed 34 times
Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October. MCO Leather Direct Materials Budget Units to produce Materials required per unit (pounds) Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required (pounds) Less: Beginning materials inventory Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases September $ 0 0 0 $ October 0 0 0
Required 1 Required 2 Required 3 Prepare direct labor budgets for September and October. (Rou MCO Leather Direct Labor Budget Units to produce Direct labor hours required per unit Direct labor hours needed Direct labor cost per hour Cost of direct labor September October $ 0 0 $ 0 0
Required 1 Required 2 Required 3 Prepare factory overhead budgets for September and October. MCO Leather Factory Overhead Budget Direct labor hours needed Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead September $ October 0 $ 0 0 0
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