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MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $16 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $16,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to be produced September 5,500 Required 1 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. October 7,200 Complete this question by entering your answers in the tabs below. Budgeted production (units) Materials requirements per unit (lbs.) Materials needed for production (lbs.) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (lbs.) Required 2 Required 3 Prepare direct materials budgets for September and October. MCO Leather Direct Materials Budget For the Months of September and October September 5,500 0 November 5,900 0 0 October 0 0 0

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $16 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $16,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to be produced September 5,500 Required 1 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. October 7,200 Complete this question by entering your answers in the tabs below. Budgeted production (units) Materials requirements per unit (lbs.) Materials needed for production (lbs.) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (lbs.) Required 2 Required 3 Prepare direct materials budgets for September and October. MCO Leather Direct Materials Budget For the Months of September and October September 5,500 0 November 5,900 0 0 October 0 0 0

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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MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $16 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $16,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to be produced September 5,500 Required 1 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. Complete this question by entering your answers in the tabs below. Required 2 Required 3 October 7,200 MCO Leather Prepare direct materials budgets for September and October. Budgeted production (units) Materials requirements per unit (lbs.) Materials needed for production (lbs.) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (bs.) Direct Materials Budget For the Months of September and October September 5,500 0 November 5,900 0 0 October 0 0 0
Transcribed Image Text:MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $16 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $16,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to be produced September 5,500 Required 1 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. Complete this question by entering your answers in the tabs below. Required 2 Required 3 October 7,200 MCO Leather Prepare direct materials budgets for September and October. Budgeted production (units) Materials requirements per unit (lbs.) Materials needed for production (lbs.) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (bs.) Direct Materials Budget For the Months of September and October September 5,500 0 November 5,900 0 0 October 0 0 0
Required 1 Required 2 Required 3 Prepare direct labor budgets for September and October. (Round "DL hours required per unit" answers t MCO Leather Direct Labor Budget For the Months of September and October September Budgeted production (units) DL hours required per unit Total direct labor hours needed Direct labor rate per hour Total budgeted direct labor $ 0 0 Total direct labor hours needed VOH rate per DL hour Budgeted variable overhead Budgeted fixed overhead Total budgeted factory overhead October $ Required 1 Required 2 Required 0 Required 1 $ Prepare factory overhead budgets for September and October. MCO Leather Factory Overhead Budget For the Months of September and October September October 0 0 $ 0 Required 3 > 0
Transcribed Image Text:Required 1 Required 2 Required 3 Prepare direct labor budgets for September and October. (Round "DL hours required per unit" answers t MCO Leather Direct Labor Budget For the Months of September and October September Budgeted production (units) DL hours required per unit Total direct labor hours needed Direct labor rate per hour Total budgeted direct labor $ 0 0 Total direct labor hours needed VOH rate per DL hour Budgeted variable overhead Budgeted fixed overhead Total budgeted factory overhead October $ Required 1 Required 2 Required 0 Required 1 $ Prepare factory overhead budgets for September and October. MCO Leather Factory Overhead Budget For the Months of September and October September October 0 0 $ 0 Required 3 > 0
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