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Business
Accounting
Direct Labor Cost Budgets

Direct Labor Cost Budgets

FINANCIAL ACCOUNTING
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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Production and Direct Labor Cost Budgets Blue Pants & Co. manufactures slacks and jeans under a variety of brand names, such as Blue Easy and Tracy Jeans. Slacks and jeans are assembled by a variety of different sewing operations. As: that the sales budget for Blue Easy and Tracy Jeans shows estimated sales of 33,960 and 65,540 pairs, respectively, for May. The finished goods inventory is assumed as follows: Blue Easy Tracy Jeans May 1 estimated inventory 1,520 1,850 May 31 desired inventory 560 2,310 Assume the following direct labor data per 10 pairs of Blue Easy and Tracy Jeans for four different sewing operations: Direct Labor per 10 Pairs Blue Easy Tracy Jeans Inseam 20 minutes 14 minutes Outerseam 24 17 Pockets 8 10 Zipper 11 7 Total 63 minutes 48 minutes a. Prepare a production budget for May. BLUE PANTS & CO. Production Budget Мay (Assumed Data) Blue Easy (Units) Tracy Jeans (Units) Expected units to be sold 33,960 V 65,540 V Plus May 31 desired inventory 560 2,310 Total units 34,520 V 67,850 Less May 1 estimated inventory -1,520 -1,850
Transcribed Image Text:Production and Direct Labor Cost Budgets Blue Pants & Co. manufactures slacks and jeans under a variety of brand names, such as Blue Easy and Tracy Jeans. Slacks and jeans are assembled by a variety of different sewing operations. As: that the sales budget for Blue Easy and Tracy Jeans shows estimated sales of 33,960 and 65,540 pairs, respectively, for May. The finished goods inventory is assumed as follows: Blue Easy Tracy Jeans May 1 estimated inventory 1,520 1,850 May 31 desired inventory 560 2,310 Assume the following direct labor data per 10 pairs of Blue Easy and Tracy Jeans for four different sewing operations: Direct Labor per 10 Pairs Blue Easy Tracy Jeans Inseam 20 minutes 14 minutes Outerseam 24 17 Pockets 8 10 Zipper 11 7 Total 63 minutes 48 minutes a. Prepare a production budget for May. BLUE PANTS & CO. Production Budget Мay (Assumed Data) Blue Easy (Units) Tracy Jeans (Units) Expected units to be sold 33,960 V 65,540 V Plus May 31 desired inventory 560 2,310 Total units 34,520 V 67,850 Less May 1 estimated inventory -1,520 -1,850
Total units 34,520 67,850 Less May 1 estimated inventory -1,520 -1,850 Total units to be produced 33,000 66,000 Feedback V Check My Work a. Expected sales plus desired ending inventory minus estimated beginning inventory. o. Prepare the May direct labor cost budget for the four sewing operations, assuming a $10.00 wage per hour for the inseam and outerseam sewing operations and a $18.00 wage per hour for the pocket and zipper sewing operations. BLUE PANTS & CO. Direct Labor Cost Budget May (Assumed Data) Inseam (minutes) Outerseam (minutes) Pockets (minutes) Zipper (minutes) Total Blue Easy 66,000 79,200 26,400 36,300 Tracy Jeans 92,400 112,200 66,000 46,200 Total minutes 158,400 191,400 92,400 82,500 Total direct labor hours Direct labor rate 10 10 18 $1 18 Total direct labor cost
Transcribed Image Text:Total units 34,520 67,850 Less May 1 estimated inventory -1,520 -1,850 Total units to be produced 33,000 66,000 Feedback V Check My Work a. Expected sales plus desired ending inventory minus estimated beginning inventory. o. Prepare the May direct labor cost budget for the four sewing operations, assuming a $10.00 wage per hour for the inseam and outerseam sewing operations and a $18.00 wage per hour for the pocket and zipper sewing operations. BLUE PANTS & CO. Direct Labor Cost Budget May (Assumed Data) Inseam (minutes) Outerseam (minutes) Pockets (minutes) Zipper (minutes) Total Blue Easy 66,000 79,200 26,400 36,300 Tracy Jeans 92,400 112,200 66,000 46,200 Total minutes 158,400 191,400 92,400 82,500 Total direct labor hours Direct labor rate 10 10 18 $1 18 Total direct labor cost
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