Answered: Levi Strauss & 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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Question

Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers^® and 501 Jeans^®. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 40,130 and 71,500 pairs, respectively, for May. The finished goods inventory is assumed as follows:

	Dockers	501 Jeans
May 1 estimated inventory	1,790		2,020
May 31 desired inventory	660		2,520

Assume the following direct labor data per 10 pairs of Dockers and 501 Jeans for four different sewing operations:

	Direct Labor per 10 Pairs
	Dockers	501 Jeans
Inseam	18	minutes	12	minutes
Outerseam	22		15
Pockets	7		9
Zipper	10		6
Total	57	minutes	42	minutes

a. Prepare a production budget for May.

LEVI STRAUSS & CO.
Production Budget
May
	Dockers^®	501 Jeans^®
Expected units to be sold	fill in the blank 95621304a05604c_1	fill in the blank 95621304a05604c_2
	fill in the blank 95621304a05604c_4	fill in the blank 95621304a05604c_5
Total units	fill in the blank 95621304a05604c_6	fill in the blank 95621304a05604c_7
	fill in the blank 95621304a05604c_9	fill in the blank 95621304a05604c_10
Total units to be produced	fill in the blank 95621304a05604c_11	fill in the blank 95621304a05604c_12

b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $12.00 wage per hour for the inseam and outerseam sewing operations and a $15.00 wage per hour for the pocket and zipper sewing operations.

LEVI STRAUSS & CO.
Direct Labor Cost Budget
May
	Inseam (minutes)	Outerseam (minutes)	Pockets (minutes)	Zipper (minutes)	Total
Dockers^®	fill in the blank 89dfa301205f03f_1	fill in the blank 89dfa301205f03f_2	fill in the blank 89dfa301205f03f_3	fill in the blank 89dfa301205f03f_4
501 Jeans^®	fill in the blank 89dfa301205f03f_5	fill in the blank 89dfa301205f03f_6	fill in the blank 89dfa301205f03f_7	fill in the blank 89dfa301205f03f_8
Total minutes	fill in the blank 89dfa301205f03f_9	fill in the blank 89dfa301205f03f_10	fill in the blank 89dfa301205f03f_11	fill in the blank 89dfa301205f03f_12
Total direct labor hours	fill in the blank 89dfa301205f03f_13	fill in the blank 89dfa301205f03f_14	fill in the blank 89dfa301205f03f_15	fill in the blank 89dfa301205f03f_16
Direct labor rate	$fill in the blank 89dfa301205f03f_17	$fill in the blank 89dfa301205f03f_18	$fill in the blank 89dfa301205f03f_19	$fill in the blank 89dfa301205f03f_20
Total direct labor cost	$fill in the blank 89dfa301205f03f_21	$fill in the blank 89dfa301205f03f_22	$fill in the blank 89dfa301205f03f_23	$fill in the blank 89dfa301205f03f_24	$fill in the blank 89dfa301205f03f_25

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