Ask Question
BusinessBusiness
26 April, 04:15

MCO Leather manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $17 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $13,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's materials requirement. At the end of August the company had 3,480 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget September October November Units to be produced 5,300 6,900 6,300 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October.

+4
Answers (1)
  1. 26 April, 04:34
    0
    Results are below.

    Explanation:

    Giving the following information:

    Direct material:

    Each purse requires 3 pounds of direct materials for $4 per pound.

    The company's policy is to end each month with direct materials inventory equal to 40% of the next month's materials requirement.

    At the end of August the company had 3,480 pounds of direct materials in inventory.

    Direct labor:

    0.7 direct labor hours at a rate of $17 per hour.

    Overhead:

    Variable manufacturing overhead is charged at a rate of $3 per direct labor hour.

    Fixed manufacturing overhead is $13,000 per month. T

    Production Budget:

    September = 5,300 units

    October = 6,900 units

    November = 6,300 units

    1) Direct material budget:

    September (in pounds):

    Production = 5,300*3 = 15,900

    Desired ending inventory = (6,900*3) * 0.4 = 8,280

    Beginning inventory = (3,480)

    Total pounds = 20,700

    Total cost = 20,700*4 = $82,800

    October (in pounds):

    Production = 6,900*3 = 20,700

    Desired ending inventory = (6,300*3) * 0.4 = 7,560

    Beginning inventory = (8,280)

    Total pounds = 19,980

    Total cost = 19,980*4 = $79,920

    2) Direct labor:

    September:

    Total direct labor hours = 0.7*5,300 = 3,710

    Total cost = 3,710*17 = $63,070

    October:

    Total direct labor hours = 0.7*6,900 = 4,830

    Total cost = 4,830*17 = $82,110

    3) Manufacturing overhead:

    September:

    Variable overhead = $3*3,710 = $11,130

    Fixed overhead = 13,000

    Total overhead = $24,130

    October:

    Variable overhead = $3*4,830 = $14,490

    Fixed overhead = 13,000

    Total overhead = $27,490
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “MCO Leather manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluation.
Answers (1)
fixed expenses are expenses that do not change from month to month and variable expenses are expenses that can fluctuate from to month to month complete the second column of the chart by determining if each expense is fixed or variable
Answers (1)
1. Distinguish between evolutionary change and revolutionary change. Provide an example where managers might implement each type of change.
Answers (1)
Henry Inc., a manufacturing firm, is able to produce 1,000 pairs of sneakers per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 800 units per hour.
Answers (1)
Cinder Company had the following department information for the month: Total materials costs $ 60,000 Equivalent units of materials 10,000 Total conversion costs $90,000 Equivalent units of conversion costs 20,000 How much is the total manufacturing
Answers (1)
New Questions in Business
Marin Inc. has an investment in trading securities of $143000. This investment experienced an unrealized loss of $7300 during the current year.
Answers (1)
Jim Bob Airlines has one 57 seat plane. On its last five flights it had 44 passengers from MSY to DFW, 49 passengers from DFW to OKL, 36 passengers from OKL to TUL, 30 passengers from TUL to FWB, and 49 passengers from FWB to MSY.
Answers (1)
All of the following are stakeholders of a firm, except
Answers (2)
A country currently has an outstanding debt of $45 billion. Its current-year expenditures are $12 billion and its tax revenue is $14 billion.
Answers (1)
Yakov left his job as a plumber when his wife took a position in another region. the quantity of plumbing services demanded is considerably lower in the new region, in part because of high union-negotiated wages.
Answers (1)
Home » Business » MCO Leather manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $17 per hour.
Sign Up Forgot Password?