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
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe69a499e-b081-4a08-acaa-9c7a9864cab2%2F59bcda0f-b338-4408-8471-f1d3355b6e15%2Fr4jzqmg_processed.jpeg&w=3840&q=75)
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe69a499e-b081-4a08-acaa-9c7a9864cab2%2F59bcda0f-b338-4408-8471-f1d3355b6e15%2Fzzx8u88_processed.jpeg&w=3840&q=75)
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