Ask Question
BusinessBusiness
24 October, 10:32

MCO Leather Goods manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $15 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $10,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's materials requirement. At the end of August the company had 2,880 pounds of direct materials in inventory. The company's production budget reports the following.

Production Budget September October November

Units to be produced 5,200 6,300 6,100

a. Prepare direct materials budgets for September and October.

b. Prepare direct labor budgets for September and October.

c. Prepare factory overhead budgets for September and October.

+1
Answers (1)
  1. 24 October, 13:04
    0
    Direct Materials Purchases Budget Sept 51680 October 60160

    Direct labor Budget September 54600 October 66150

    Overhead Budget Sept $ 20920 October $23,230

    Explanation:

    The budgets are calculated in the following ways.

    We multiply the required material, direct labor hour or variable overhead rate with the given number of units and then with the cost per unit to get the total costs.

    MCO Leather Goods Manufacturers

    Direct Materials

    Purchases Budget

    September October November

    Production 5200 6300 6100

    Pounds per units * 2 * 2 * 2

    Total Pounds 10400 12600 12200

    Cost per pound * $4 * $4 * $4

    Total cost 41600 50400 48800

    On hand

    Inventory + 10080 + 9760 - --

    Direct Materials

    Purchases Budget 51680 60160

    MCO Leather Goods Manufacturers

    Direct Labor Budget

    September October

    Production 5200 6300

    Hours required per unit * 0.7 * 0.7

    Total hours 3640 4410

    Rate per hour * $15 * $15

    Total labor Cost 54600 66150

    MCO Leather Goods Manufacturers

    Factory Overhead Budget

    September October

    Production 5200 6300

    Hours required per unit * 0.7 * 0.7

    Labor Hours 3640 4410

    Variable OH * $3 * $3

    Variable Costs $10920 $13230

    Fixed OH + $10,000 + $10,000

    Total OH $ 20920 $23,230
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “MCO Leather Goods manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
The standards for product G78V specify 5.6 direct labor-hours per unit at $13.60 per direct labor-hour. Last month 1,750 units of product G78V were produced using 9,850 direct labor-hours at a total direct labor wage cost of $130,220. Required: a.
Answers (1)
At the beginning of May, Golden Gopher Company reports a balance in Supplies of $380. On May 15, Golden Gopher purchases an additional $2,100 of supplies for cash. By the end of May, only $180 of supplies remains.
Answers (1)
When the price of a necessity increases, demand is likely to be - because consumers - that product to survive. However, when the price of a luxury good increases, consumers may - because the good is not crucial to survival.
Answers (1)
As the marginal propensity to expend rises, the multiplier:
Answers (1)
Plant manager's salary at buffalo, new york, stamping plant, which manufactures auto and truck subassemblies
Answers (1)
New Questions in Business
Demographic data are collected for every study. what is the purpose of describing the demographic data?
Answers (1)
Which of the following would not be considered internal users of accounting data for a company? The controller of a company. Salesmen of the company. Creditors of a company. The president of a company.
Answers (1)
Which best describes the function of the federal reserve system Administration of taxes Control of money supply Oversight of international trade Regulation of commerce
Answers (1)
Fuente, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $1,030 2 1,260 3 1,480 4 2,220 a. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4? b.
Answers (1)
Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfolio is 17%, and on the zero-beta portfolio it is 8%. What is the expected return on a portfolio with a beta of 0.
Answers (1)
Home » Business » MCO Leather Goods manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $15 per hour.
Sign Up Forgot Password?