1) Johnson Inc. produces leather handbags. Johnson Inc. estimates it will use 4,

Question

1)

Johnson Inc. produces leather handbags. Johnson Inc. estimates it will use 4,400 square meters of leather in production in August, and 3,800 square meters of leather in production in September. Johnson Inc. leather inventory policy is 25% of next month’s production needs. What will leather purchases be in August?

4,550 square meters

4,400 square meters

5,350 square meters

4,250 square meters

2)

Jillian Inc. produces leather handbags. The production budget for the next four months is: July 5,000 units, August 7,000, September 7,500, October 8,000. Each handbag requires 1.3 hours of unskilled labor (paid $8 per hour) and 2.2 hours of skilled labor (paid $15 per hour). How many unskilled labor hours will be budgeted for August?

9,100

24,500

15,400

7,000

3)

Skylark has forecast production for the next three months as follows: July 4,900 units, August 7,200 units, September 8,300 units. Monthly manufacturing overhead is budgeted to be $17,700 plus $7 per unit produced. What is budgeted manufacturing overhead for July?

$57,500

$37,500

$34,300

$52,000

Explanation / Answer

1 Leather purchases be in August = 4400+(3800*25%)-(4400*25%)= 4250 2 Unskilled labor hours for August = 7000*1.3= 9100 3 Budgeted manufacturing overhead for July = 17700+(4900*7)= 52000

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