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MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $18 per hour. Variable overhead is budgeted at a rate of $3 per direct labor hour. Budgeted fixed overhead is $13,000 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 2,820 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,700 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Units to produce October 6,800 Prepare direct materials budgets for September and October. Materials needed for production (pounds) Total materials required (pounds) November 6,100 Materials to purchase (pounds) MCO Leather Direct Materials Budget Cost of direct materials purchases September October 11

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $18 per hour. Variable overhead is budgeted at a rate of $3 per direct labor hour. Budgeted fixed overhead is $13,000 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 2,820 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,700 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Units to produce October 6,800 Prepare direct materials budgets for September and October. Materials needed for production (pounds) Total materials required (pounds) November 6,100 Materials to purchase (pounds) MCO Leather Direct Materials Budget Cost of direct materials purchases September October 11

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 $5 per pound and 0.7 direct labor hour at a rate of $18 per hour. Variable overhead is budgeted at a rate of $3 per direct labor hour. Budgeted fixed overhead is $13,000 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 2,820 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,700 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Units to produce October 6,800 Prepare direct materials budgets for September and October. Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) November 6,100 MCO Leather Direct Materials Budget Cost of direct materials purchases September October
Transcribed Image Text:MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $5 per pound and 0.7 direct labor hour at a rate of $18 per hour. Variable overhead is budgeted at a rate of $3 per direct labor hour. Budgeted fixed overhead is $13,000 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 2,820 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,700 (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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Units to produce October 6,800 Prepare direct materials budgets for September and October. Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) November 6,100 MCO Leather Direct Materials Budget Cost of direct materials purchases September October
Prepare direct labor budgets for September and October. Note: Round "DL hours required per unit" answers to one decimal place. Units to produce MCO Leather Direct Labor Budget Direct labor hours needed Cost of direct labor Direct labor hours needed Prepare factory overhead budgets for September and October. Budgeted variable overhead September October < Required 1 Budgeted total factory overhead MCO Leather Factory Overhead Budget September < Required 2 Required 3 > October Required 3
Transcribed Image Text:Prepare direct labor budgets for September and October. Note: Round "DL hours required per unit" answers to one decimal place. Units to produce MCO Leather Direct Labor Budget Direct labor hours needed Cost of direct labor Direct labor hours needed Prepare factory overhead budgets for September and October. Budgeted variable overhead September October < Required 1 Budgeted total factory overhead MCO Leather Factory Overhead Budget September < Required 2 Required 3 > October Required 3
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