Macchu Company produces stuffed toy animals; one of these is "Andie the llama." Each Andie takes 0.30 yards of fabric in 8 ounces of poly fiber fill. Fabric cost $3.50 per yard and poly fiberfill is $0.05 per ounce. Macchu has budgeted production of Andies for the next four months as follows: Units October 42,000 November 90,000 December 50,000 January 40,000 Inventory policy requires that sufficient fabric be in the ending monthly inventory to satisfy 10% of the following month's production needs and sufficient poly fiberfill be in inventory to satisfy 15% of the following month's production needs. Inventory of fabric and poly fiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy. Each Andie produced requires (on average) 0.25 direct labor hours. The average cost of direct labor is $14 per hour. Requires: 1. Prepare a direct materials purchased his budget of fabric for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total. 2. Prepare a direct materials purchases budget of poly fiberfill for the last quarter of the year showing purchases in units and dollars for each month and for the quarter in total. 3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and the direct labor cost for each month and for the quarter in total.
Macchu Company produces stuffed toy animals; one of these is "Andie the llama." Each Andie takes 0.30 yards of fabric in 8 ounces of poly fiber fill. Fabric cost $3.50 per yard and poly fiberfill is $0.05 per ounce. Macchu has budgeted production of Andies for the next four months as follows:
| Units | |
| October | 42,000 |
| November | 90,000 |
| December | 50,000 |
| January | 40,000 |
Inventory policy requires that sufficient fabric be in the ending monthly inventory to satisfy 10% of the following month's production needs and sufficient poly fiberfill be in inventory to satisfy 15% of the following month's production needs. Inventory of fabric and poly fiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.
Each Andie produced requires (on average) 0.25 direct labor hours. The average cost of direct labor is $14 per hour.
Requires:
1. Prepare a direct materials purchased his budget of fabric for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total.
2. Prepare a direct materials purchases budget of poly fiberfill for the last quarter of the year showing purchases in units and dollars for each month and for the quarter in total.
3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and the direct labor cost for each month and for the quarter in total.
Step by step
Solved in 3 steps with 2 images
