MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 directlabor hour at a rate of $11 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is$20,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's directmaterials requirement. At the end of August the company had 1,760 pounds of direct materials in inventory. The company's productionbudget reports the following.Production Budget SeptemberUnits to produce4,400(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 1 Required 2 Required 3October6,900Units to producePrepare direct materials budgets for September and October.Total materials required (pounds)November6,700Materials needed for production (pounds)Materials to purchase (pounds)MCO LeatherDirect Materials BudgetSeptemberPrevOctober5 of 10Next >

The budget is prepared to estimate the requirements for the future period. The direct materials…

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hour at a rate of $11 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $20,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's direct materials requirement. At the end of August the company had 1,760 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget September Units to produce 4,400 October 6,900 November 6,700 (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.

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hour at a rate of $11 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $20,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's direct materials requirement. At the end of August the company had 1,760 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget September Units to produce 4,400 October 6,900 November 6,700 (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.

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 hour at a rate of $12 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $11,000 per month. The company's policy is to end each month with direct materials Inventory equal to 30% of the next month's direct materials requirement. At the end of August the company had 2,580 pounds of direct materials in Inventory. The company's production budget reports the following. Production Budget Units to produce 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. September 4,300 Complete this question by entering your answers in the tabs below. Units to produce October 6,800 Required 2 Required 3 Prepare direct labor budgets for September and October. (Round "DL…
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