Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requir
ID: 2514428 • Letter: O
Question
Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 9 pounds of direct materials at a cost of $3 per pound and 0.4 direct labor hours at a rate of $17 per hour. Variable manufacturing overhead is charged at a rate of $4 per direct labor hour. Fixed manufacturing overhead is $4,600 per month. The company’s policy is to maintain direct materials inventory equal to 20% of the next month’s materials requirement. At the end of March the company had 5,280 pounds of direct materials in inventory. The company’s production budget reports the following.
(1) Prepare direct materials budgets for March and April.
(2) Prepare direct labor budgets for March and April.
Prepare direct labor budgets for March and April. (Round "DL hours required per unit" answers to two decimal places.)
(3) Prepare factory overhead budgets for March and April.
Production Budget March April May Units to be produced 3,400 5,100 5,300Explanation / Answer
Answer
ORNAMENTAL SCULPTURES MFG.
Direct Materials Budget
For the Months of March and April
March
April
Budgeted production (units)
3400
5100
Materials requirements per unit (lbs.)
9
9
Materials needed for production (lbs.)
30600
45900
Budgeted ending inventory (lbs.)
9180
9540
Total materials requirements (lbs.)
39780
55440
Budgeted beginning inventory (lbs.)
5280
9180
Materials to be purchased (lbs.)
34500
46260
Direct material cost per lb.
$ 3.00
$ 3.00
Total budgeted direct materials
$ 1,03,500.00
$ 1,38,780.00
ORNAMENTAL SCULPTURES MFG.
Direct Labor Budget
For the Months of March and April
March
April
Budgeted production (units)
3400
5100
DL hours required per unit
0.4
0.4
Total direct labor hours needed
1360
2040
Direct labor rate per hour
$ 17.00
$ 17.00
Total budgeted direct labor
$ 23,120.00
$ 34,680.00
ORNAMENTAL SCULPTURES MFG.
Factory Overhead Budget
For the Months of March and April
March
April
Total direct labor hours needed
1360
2040
VOH rate per DL hour
$ 4.00
$ 4.00
Budgeted variable overhead
$ 5,440.00
$ 8,160.00
Budgeted fixed overhead
$ 4,600.00
$ 4,600.00
Total budgeted factory overhead
$ 10,040.00
$ 12,760.00
ORNAMENTAL SCULPTURES MFG.
Direct Materials Budget
For the Months of March and April
March
April
Budgeted production (units)
3400
5100
Materials requirements per unit (lbs.)
9
9
Materials needed for production (lbs.)
30600
45900
Budgeted ending inventory (lbs.)
9180
9540
Total materials requirements (lbs.)
39780
55440
Budgeted beginning inventory (lbs.)
5280
9180
Materials to be purchased (lbs.)
34500
46260
Direct material cost per lb.
$ 3.00
$ 3.00
Total budgeted direct materials
$ 1,03,500.00
$ 1,38,780.00
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