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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 0.7 direct labor hour at a rate of $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,800 October 6,500 November 6,800 (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.

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 $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,800 October 6,500 November 6,800 (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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 0.7 direct labor hour at a rate of $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,800 (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. Required 1 Complete this question by entering your answers in the tabs below. Units to produce Required 2 Required 3 Prepare direct materials budgets for September and October. October 6,500 Total materials required (pounds) Materials needed for production (pounds) Materials to purchase (pounds) November 6,800 MCO Leather Cost of direct materials purchases Direct Materials Budget September October < Required 1 Required 2 >
Transcribed Image Text: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 $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce September 4,800 (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. Required 1 Complete this question by entering your answers in the tabs below. Units to produce Required 2 Required 3 Prepare direct materials budgets for September and October. October 6,500 Total materials required (pounds) Materials needed for production (pounds) Materials to purchase (pounds) November 6,800 MCO Leather Cost of direct materials purchases Direct Materials Budget September October < Required 1 Required 2 >
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 $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce (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 Prepare direct labor budgets for September and October. Note: Round "DL hours required per unit" answers to one decimal place. Direct labor hours needed Cost of direct labor September 4,800 Production Budget Units to produce October 6,500 MCO Leather Direct Labor Budget Required 1 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 $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19.000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. November 6,800 Direct labor hours needed September October Budgeted variable overhead September October 4,800 6,500 (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. Required 2 Required 3 < Required 1 Complete this question by entering your answers in the tabs below. Budgeted total factory overhead Prepare factory overhead budgets for September and October. November 6,800 MCO Leather Factory Overhead Budget Required 3 > September < Required 2 October Required 3 >
Transcribed Image Text: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 $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19,000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to produce (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 Prepare direct labor budgets for September and October. Note: Round "DL hours required per unit" answers to one decimal place. Direct labor hours needed Cost of direct labor September 4,800 Production Budget Units to produce October 6,500 MCO Leather Direct Labor Budget Required 1 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 $20 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $19.000 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 2,880 pounds of direct materials in inventory. The company's production budget reports the following. November 6,800 Direct labor hours needed September October Budgeted variable overhead September October 4,800 6,500 (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. Required 2 Required 3 < Required 1 Complete this question by entering your answers in the tabs below. Budgeted total factory overhead Prepare factory overhead budgets for September and October. November 6,800 MCO Leather Factory Overhead Budget Required 3 > September < Required 2 October Required 3 >
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