. Evans Company produces stuffed toy animals; one of these is Randy the Reindeer. Each reindeer takes 0.10 yard of fabric and three ounces of polyfiberfill. Fabric costs $3.50 per yard, and polyfiberfill is $0.05 per ounce. Ivans has budgeted production of stuffed reindeer for the next four months as follows: October 40,000; November 80,000; December 50,000; January 60,000. Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 15 percent of the following month’s production needs and sufficient polyfiberfill be in inventory to satisfy 30 percent of the following month’s production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.Each reindeer produced requires (on average) 0.2 direct labor hour. The average cost of direct labor is $10.50 per hour. 1.Compute for the budgeted direct labor cost for October. 2.Compute for the budgeted direct labor cost for December.
E. Evans Company produces stuffed toy animals; one of these is Randy the Reindeer. Each reindeer takes 0.10 yard of fabric and three ounces of polyfiberfill. Fabric costs $3.50 per yard, and polyfiberfill is $0.05 per ounce. Ivans has budgeted production of stuffed reindeer for the next four months as follows: October 40,000; November 80,000; December 50,000; January 60,000. Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 15 percent of the following month’s production needs and sufficient polyfiberfill be in inventory to satisfy 30 percent of the following month’s production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.Each reindeer produced requires (on average) 0.2 direct labor hour. The average cost of direct labor is $10.50 per hour.
1.Compute for the budgeted direct labor cost for October.
2.Compute for the budgeted direct labor cost for December.
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