1. Each unit requires 3 pounds of direct materials, which cost $6 per pound. The
ID: 2566470 • Letter: 1
Question
1. Each unit requires 3 pounds of direct materials, which cost $6 per pound. The company’s policy is to maintain direct materials inventory equal to 20% of the next month’s direct materials requirement. As of June 30, the company has 3,240 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July.
2. Each unit requires 4 hours of direct labor at a rate of $16 per hour. Prepare a direct labor budget for July.
-budget production: 5,400
-total hours needed:
-budgeted cost of direct labor:
3. Each unit requires 4 hours of direct labor at a rate of $16 per hour. Variable factory overhead is budgeted to be 60% of direct labor cost, and fixed factory overhead is $171,000 per month. Prepare a factory overhead budget for August.
MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Budget production (units) 5,400 Materials needed for production (lbs.) Total materials requirements (lbs.) Materials to be purchased (lbs.) Budgeted cost of direct materials purchasesExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Amount Budget production (units) 5,400.00 Direct material required per unit 3.00 Materials needed for production (lbs.) = 5400*3 16,200.00 Ending Raw materials - No info is given thus assumed 0 - Total materials requirements (lbs.) 16,200.00 Beginning raw materials 3,240.00 Materials to be purchased (lbs.) = 16200 - 3240 12,960.00 Cost per pound 6.00 Budgeted cost of direct materials purchases = 12960*6 77,760.00 2) Budgeted Production 5,400.00 Hours required per unit 4.00 Total hours needed 21,600.00 Direct labour rate per hour 16.00 Total Labour cost 345,600.00 3) Variable factory overhead = 60%*345600 207,360.00 Fixed factory overhead 171,000.00 Budgeted total overhead 378,360.00
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