O ezto.mheducaior.conymm value 1.87 points leather purses. Each purse requires 2
ID: 2579732 • Letter: O
Question
O ezto.mheducaior.conymm value 1.87 points leather purses. Each purse requires 2 pounds of direct materials at a MCO Leather cost of $5 per pound and 0.7 direct labor hours at a rate of $12 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $19,000 per month. The company's policy is to end each month with direct materials inventory equal to 30% of the next month's materials requirement. At the end of August the company had 4,180 pounds of direct materials in inventory The company's production budget reports the following Units to be produced 5,300 6,400 6,600 (1) Prepare direct materials budgets for September and October MCO Leather Goods Direct Materials Budget For the Months of September and October September October Budgeted production (units) Materials requirements per unit Materials needed for production (lbs) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Budgeted beginning inventory (lbs.) Materials to be purchased (lbs.) Direct material cost per lb Total budgeted direct materialsExplanation / Answer
direct material budget
2
2
5300*2
=10600
6400*2
=12800
30% of 12800
=3840
30% of nov. production (6600*2)
=3960
10260*5
=$ 51300
12920 *5
=$ 64600
september october budgted production ( in units ) 5300 6400 material requirement per unit2
2
materials needed for production (lbs.)5300*2
=10600
6400*2
=12800
budgeted ending inventory (30% of next month requirement)30% of 12800
=3840
30% of nov. production (6600*2)
=3960
total materials requirement (lbs.) 14440 16760 budgeted beginning inventory 4180 (given) 3840 (ending inventory of september) materials to be purchased 10260 12920 direct material cost per lb. $ 5 $ 5 total budgeted direct materials10260*5
=$ 51300
12920 *5
=$ 64600
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