**Blue Pants & Co.** manufactures slacks and jeans under various brand names, such as Blue Easy and Tracy Jeans. These garments are assembled through different sewing operations. For May, the sales budget indicates estimated sales of 33,960 pairs for Blue Easy and 65,540 pairs for Tracy Jeans. The finished goods inventory is outlined below:**Inventory Estimates:**| | Blue Easy | Tracy Jeans ||--------------------------|-----------|-------------|| **May 1 estimated inventory** | 1,520 | 1,850 || **May 31 desired inventory** | 560 | 2,310 |**Direct Labor per 10 Pairs:**For the sewing operations of Blue Easy and Tracy Jeans, the following direct labor times are assumed:| Operation | Blue Easy | Tracy Jeans ||-------------|-----------|-------------|| **Inseam** | 20 minutes | 14 minutes || **Outerseam** | 24 minutes | 17 minutes || **Pockets** | 8 minutes | 10 minutes || **Zipper** | 11 minutes | 7 minutes || **Total** | 63 minutes | 48 minutes |**a. Production Budget for May:***BLUE PANTS & CO. Production Budget: May (Assumed Data)*- **Expected units to be sold:**| | Blue Easy (Units) | Tracy Jeans (Units) ||-------------------|-------------------|---------------------|| **Plus May 31 desired inventory** | | || **Total units** | | || **Less May 1 estimated inventory**| | || **Total units to be produced** | | | **Transcription for Educational Website:**---### Direct Labor Cost Budget Preparation**Context:**This section explains how to prepare a May direct labor cost budget for four sewing operations at Blue Pants & Co. The budget is based on the following wage rates: $10.00 per hour for inseam and outerseam operations, and $18.00 per hour for pocket and zipper operations.**Budget Table:****BLUE PANTS & CO.****Direct Labor Cost Budget** **May (Assumed Data)**| Operations | Inseam (minutes) | Outerseam (minutes) | Pockets (minutes) | Zipper (minutes) | Total ||-------------------|------------------|---------------------|-------------------|------------------|-------|| **Blue Easy** | | | | | || **Tracy Jeans** | | | | | || **Total minutes** | | | | | || **Total direct labor hours** | | | | | || **Direct labor rate** | $10.00 | $10.00 | $18.00 | $18.00 | || **Total direct labor cost** | | | | | |**Instructions:**1. **Calculate Minutes:** - For each product (Blue Easy and Tracy Jeans), input the time in minutes required for each of the four operations: inseam, outerseam, pockets, and zipper.2. **Aggregate Minutes:** - Sum the minutes for each operation across the two products to find the "Total minutes."3. **Convert Minutes to Hours:** - Divide the "Total minutes" by 60 to determine the "Total direct labor hours."4. **Labor Cost Calculation:** - Apply the respective direct labor rate to calculate the total cost for each operation. - Multiply the "Total direct labor hours" by the direct labor rate to determine the "Total direct labor cost."This budget helps in effective cost planning and decision-making for labor expenses in the sewing operations of Blue Pants & Co.

Production Budget: It is the calculation of a product that must be produced. it is prepared by forecasting the sales and planned amount of finished goods.Key Points: 1. The minutes for each item are calculated by applying the following formula For Blue Easy= Production units (33000)* Number of minutes for the respective sewing operation. For Tracy jeans= Production units (66000)* Number of minutes for the respective sewing operation. 2. Total minutes are converted into hours by dividing total minutes by 60. 3. Total direct labor cost= Total direct labor hours * Direct labor rate per hour.

Answered: Blue Pants & Co. manufactures slacks…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transcribed Image Text:**Blue Pants & Co.** manufactures slacks and jeans under various brand names, such as Blue Easy and Tracy Jeans. These garments are assembled through different sewing operations. For May, the sales budget indicates estimated sales of 33,960 pairs for Blue Easy and 65,540 pairs for Tracy Jeans. The finished goods inventory is outlined below: **Inventory Estimates:** | | Blue Easy | Tracy Jeans | |--------------------------|-----------|-------------| | **May 1 estimated inventory** | 1,520 | 1,850 | | **May 31 desired inventory** | 560 | 2,310 | **Direct Labor per 10 Pairs:** For the sewing operations of Blue Easy and Tracy Jeans, the following direct labor times are assumed: | Operation | Blue Easy | Tracy Jeans | |-------------|-----------|-------------| | **Inseam** | 20 minutes | 14 minutes | | **Outerseam** | 24 minutes | 17 minutes | | **Pockets** | 8 minutes | 10 minutes | | **Zipper** | 11 minutes | 7 minutes | | **Total** | 63 minutes | 48 minutes | **a. Production Budget for May:** *BLUE PANTS & CO. Production Budget: May (Assumed Data)* - **Expected units to be sold:** | | Blue Easy (Units) | Tracy Jeans (Units) | |-------------------|-------------------|---------------------| | **Plus May 31 desired inventory** | | | | **Total units** | | | | **Less May 1 estimated inventory**| | | | **Total units to be produced** | | |

**Transcription for Educational Website:**

---

### Direct Labor Cost Budget Preparation

**Context:**
This section explains how to prepare a May direct labor cost budget for four sewing operations at Blue Pants & Co. The budget is based on the following wage rates: $10.00 per hour for inseam and outerseam operations, and $18.00 per hour for pocket and zipper operations.

**Budget Table:**

**BLUE PANTS & CO.**

**Direct Labor Cost Budget**
**May (Assumed Data)**

| Operations | Inseam (minutes) | Outerseam (minutes) | Pockets (minutes) | Zipper (minutes) | Total |
|-------------------|------------------|---------------------|-------------------|------------------|-------|
| **Blue Easy** | | | | | |
| **Tracy Jeans** | | | | | |
| **Total minutes** | | | | | |
| **Total direct labor hours** | | | | | |
| **Direct labor rate** | $10.00 | $10.00 | $18.00 | $18.00 | |
| **Total direct labor cost** | | | | | |

**Instructions:**

1. **Calculate Minutes:**
- For each product (Blue Easy and Tracy Jeans), input the time in minutes required for each of the four operations: inseam, outerseam, pockets, and zipper.

2. **Aggregate Minutes:**
- Sum the minutes for each operation across the two products to find the "Total minutes."

3. **Convert Minutes to Hours:**
- Divide the "Total minutes" by 60 to determine the "Total direct labor hours."

4. **Labor Cost Calculation:**
- Apply the respective direct labor rate to calculate the total cost for each operation.
- Multiply the "Total direct labor hours" by the direct labor rate to determine the "Total direct labor cost."

This budget helps in effective cost planning and decision-making for labor expenses in the sewing operations of Blue Pants & Co.

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