[ + 0 ezto.mheducation.com/hm.tpx_ Exam #2 (CH S-8) Exam #2 (CH 5-8) MCO Leather

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[ + 0 ezto.mheducation.com/hm.tpx_ Exam #2 (CH S-8) Exam #2 (CH 5-8) MCO Leather Goods manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $13 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $14,000 per month. The company's policy is to end each month with direct materials inventory equal to 30% of the next month's materials requirement. At the end of August the company had 4,380 pounds of direct materials in inventory. The company's production budget reports the following Production Budget September October November 6,000 Units to be produced 4,900 7,000 (1) Prepare direct materials budgets for September and October MCO Leather Goods Direct Materials Budget For the Months of September and October September October Budgeted production (units) Materials requirements per unit Materials needed for production (Ibs.) Budgeted ending inventory (lbs.) Total materials requirements (bs.) Budgeted beginning inventory (Ibs.) Materials to be purchased (bs.) Direct material cost per lb. Total budgeted direct materials 4,900 7,000 3.00 21,000 14,700 14,700 4,380 10,320 21,000 21,000 4.00 $41,280$ 84,000 4.00 S (2) Prepare direct labor budgets for September and October (Round "DL hours required per unit" answers to one decimal place.) MCO LEATHER GOODS Direct Labor Budget For the Months of September and October September October Budgeted production (units) unit

Explanation / Answer

Answer 1 MCO Leather Goods Direct Materials Budget For the months of September and October September October Budgeted Production (units) 4900 7000 Materials requirements per unit 3 3 Materials needed for production (lbs) 14700 21000 Budgeted Ending Inventory (lbs) 6300 5400 Total Materials requirements (lbs) 21000 26400 Budgeted beginning Inventory (lbs) 4380 6300 Materials to be purchased (lbs) 16620 20100 Direct Materials cost per lb $4.00 $4.00 Total budgeted direct materials $66,480.00 $80,400.00

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