MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.8 direct labor hour at a rate of $16 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $10,000 per month. The company’s policy is to end each month with direct materials inventory equal to 40% of the next month’s direct 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. DM per unit (pounds) DM Cost per pound DLHs per unit Direct Labor rate per hour 2 $4 0.80 $16         VOH rate per DLH Fixed Overhead Direct Materials requirement August ending inventory $2 $10,000 40% 3,680                 Production Budget September October November         Units to produce 4,600 6,200 5,800         (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.     Please provide formulas please

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.8 direct labor hour at a rate of $16 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $10,000 per month. The company’s policy is to end each month with direct materials inventory equal to 40% of the next month’s direct 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. DM per unit (pounds) DM Cost per pound DLHs per unit Direct Labor rate per hour
2 $4 0.80 $16
       
VOH rate per DLH Fixed Overhead Direct Materials requirement August ending inventory
$2 $10,000 40% 3,680
               
Production Budget September October November        
Units to produce 4,600 6,200 5,800        
(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.    

Please provide formulas please

Units to produce
Direct labor hours required per unit
Direct labor hours needed
Budgeted direct labor cost
MCO Leather
Direct Labor Budget
Direct labor hours needed
September October
4,600
(3) Prepare factory overhead budgets for September and October.
(Use cells A2 to H11 from the given information to complete this question.)
MCO Leather
Factory Overhead Budget
Budgeted variable overhead
Budgeted fixed overhead
Budgeted total factory overhead
6,200
September
October
Transcribed Image Text:Units to produce Direct labor hours required per unit Direct labor hours needed Budgeted direct labor cost MCO Leather Direct Labor Budget Direct labor hours needed September October 4,600 (3) Prepare factory overhead budgets for September and October. (Use cells A2 to H11 from the given information to complete this question.) MCO Leather Factory Overhead Budget Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead 6,200 September October
MCO Leather
Direct Materials Budget
Units to produce
Budgeted units sales for month
Materials needed for production (pounds)
Total materials required (pounds)
Materials to purchase (pounds)
Budgeted direct materials purchases
September
4,600
October
6,200
Transcribed Image Text:MCO Leather Direct Materials Budget Units to produce Budgeted units sales for month Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) Budgeted direct materials purchases September 4,600 October 6,200
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